Aus macro/retail sales/building approvals/PMIs

Generally strong macro data, out today.

Retail sales

Stronger than expected monthly print, at ~0.56%, vs 0.3% expected.

But if it is coming from a pull forward in demand through price discounting and sales promotion, it’s not likely to be (by definition) inflationary.

I imagine next month gives it all back, so I would not be chasing consumer discretionary stocks here.

Building approvals

A reasonable bounce in the volatile monthly series, coming in at +5.5% for month, vs 1.6% expected.

On a time series basis, perhaps there is some modest hope that building approvals are “forming a base” as the market adjusts to a) higher interest rates b) the pressing need for more building, and state based efforts to get us there.

PMI’s

Services PMI largely consolidated around the low 50’s, coming in at 51.2, a slight improvement on last months 51.0. Above 50 indicates expansion, relative to the prior month. These are hardly strong numbers, but when combined with the above building approvals and retail sales data, do add support to the idea that the economy is holding together.

Conculsion

Given the retail sales data was heavily dependant on promotional activity, we probably shouldn’t read much into the stronger print. Likewise, building approvals is too volatile to get a concrete read on, and given the prospect of higher rates (the RBA “throat clearing” around the possible need to hike again) suggests the series will stay anchored at these lower levels of activity.

The PMI data is more consistent with this “modest at best, pace of activity” type conclusion.

I don’t think there’s anything here to change our intuitions or conclusions, overall, from a DAA perspective. Just another months’ worth of data.

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