David Plank

Economist. Views expressed are my own.

[ANZ_Research @ANZ_Research]

ANZ-observed spending in the first week of 2023 was 4% lower than the first week of 2022, despite prices rising close to 8% in 2022 according to our CPI forecast. Households also spent less on key trading days in 2022 compared to 2020 and 2021. @AdelaideTimbrel

[Adelaide Timbrell @AdelaideTimbrel]

It's easy to attribute any data blip to the much anticipated Spending Slowdown.

But the evidence is mounting. ANZ Consumer Confidence shows people have been worried for some time, pent up demand for travel could be waning, while inflation and interest rate pressures intensify.

[David Plank @DavidPlank12]

@TheKouk Tobin’s Q doing its thing.

[David Plank @DavidPlank12]

@PPGMacro @AvidCommentator @ANZ_Research @madelinedunk Value

[David Plank @DavidPlank12]

@AvidCommentator @ANZ_Research @madelinedunk People are switching spending to services and away from goods. It was a clear part of the Q3 GDP data. Hence shopping is doing less well than total spending. A reversal of the Covid impact.

[David Plank @DavidPlank12]

@Nixon_Gill @ANZ_Research Lot of very unusual shocks to headline inflation this year.

[David Plank @DavidPlank12]

@Nixon_Gill @ANZ_Research There are a lot of one-offs that have boosted headline inflation. As these drop out we expect the headline rate to fall below 4% through next year. So the cash rate will be above inflation on our forecasts. We then think interest rates will need to stay elevated for a while.

[Sharon Zollner @sharon_zollner]

Policy outlooks for the RBA and RBNZ have diverged, despite seemingly similar inflation problems. We take a look at why. https://t.co/bU9IGboUuH

[ANZ_Research @ANZ_Research]

Australia and New Zealand have similar inflation rates, but we expect the RBA cash rate to peak at 3.85% vs the RBNZ OCR at 5.75%. Structural factors and the central banks’ views on economic trade-offs, wages, inflation expectations and neutral rates are key differentials.

[ANZ_Research @ANZ_Research]

Sydney housing prices have led the fall in Aus housing prices, but other capitals are following suit. We expect a peak-to-trough decline of 18%. #ausecon #housing @felicity_emmett @AdelaideTimbrel

[David Plank @DavidPlank12]

Spending on Black Friday was up this year compared to 2019. No doubt inflation has contributed to that but we see decent momentum pre and post Black Friday as well. November is shaping up as a bounce in retail compared to October.

[ANZ_Research @ANZ_Research]

Australian shoppers embraced Black Friday sales. This has helped boost ANZ-observed spending in November. #ausecon #retail #ausbiz @madelinedunk @DavidPlank12

[ANZ_Research @ANZ_Research]

ANZ-Roy Morgan Aus Consumer Confidence rose 1.8% (5.6% over the past three weeks) to its highest since early October. But it is still very weak. ‘Financial situation compared to a year ago’ up 9% and ‘Financial situation next year’ up 2.8% drove the rise. #ausecon @DavidPlank12

[David Plank @DavidPlank12]

@aus_econ The facts always change, which makes forecasting a touch gig. To be fair we did say at the start of the year the cash rate was going above 3%. What has shifted is the timing. And now we are thinking maybe it needs to be 4%+

[David Plank @DavidPlank12]

The Q4 WPI due in mid February is shaping up as a very critical data point. If it indicates wages growth is picking up sharply then a 4%+ cash rate may be needed.

[ANZ_Research @ANZ_Research]

ANZ Australian Macro Weekly: This week’s data cements a 25bp rate hike in December. We think at least a further 75bp will come in 2023. Increasingly we are asking whether our current peak of 3.85% will prove to be high enough. #ausecon @DavidPlank12

[David Plank @DavidPlank12]

More and more the data on inflation and wages suggest Australia is lagging global trends rather than following a different path.

[Richard Yetsenga 叶森 🇦🇺 🇭🇰 🇹🇭 🇳🇱 @ricyet]

Aus wages growth on the latest quarterly reading is now double the circa 0.5% q/q average before the pandemic. Quite a shift. A bigger challenge for business; but quite a different base for inflation and for consumption as headline inflation declines.

[ANZ_Research @ANZ_Research]

International visitors are coming back to Australia, but a lack of arrivals from China is slowing the recovery. Arrivals from India are almost back at pre-COVID levels, and we think there’s lots of upside for the Indian tourist market. #ausecon @madelinedunk @felicity_emmett

[David Plank @DavidPlank12]

Finally some respite from the relentless fall in confidence. But sentiment is still effectively at "recessionary" levels. So far this hasn't translated into a pullback in spending. Whether this disconnect continues is a key issue for the outlook and monetary policy.

[ANZ_Research @ANZ_Research]

ANZ-Roy Morgan Australian Consumer Confidence: prospects over the next year drove a 2.7% rise overall, with 31% (+1.3ppt) of people expecting to be 'better off' financially this time next year and 8% (+1.4ppt) expecting 'good times' for the economy. #ausecon @DavidPlank12

[David Plank @DavidPlank12]

@TheKouk That's what having a current account surplus can do!

[Adelaide Timbrell @AdelaideTimbrel]

Can’t stop won’t stop

[David Plank @DavidPlank12]

Inflation expectations have surged in recent weeks. This has also driven consumer confidence lower. Which makes for a tough backdrop for RBA policy considerations.

[ANZ_Research @ANZ_Research]

ANZ-Roy Morgan Aus Consumer Confidence: household inflation expectations climbed to 6.8%, its highest level since these data were first collected in April 2010. Falling confidence and rising inflation expectations creates a difficult mix for the #RBA. #ausecon @DavidPlank12