While the Australian Bureau of Statistics worries that it won’t have enough money to “turn the lights on” the private sector continues to fill the void for high frequency data.
Already the NAB monthly and quarterly business survey is a must-watch for traders as is The Westpac – Melbourne Institute’s Consumer Sentiment Survey and the TD Securities – Melbourne Institute Monthly Inflation gauge. More recently the Dun and Bradstreet Business and CBA Future business surveys have also come into prominence.
From tomorrow we can add the ANZ-Roy Morgan Weekly Consumer Confidence Pulse to the list of must watch private sector surveys.
High frequency data like weekly surveys can sometimes get heavily discounted by the market when they are released because of their very frequency but the ANZ says:
Consumer confidence is an important economic indicator, providing a reliable read on the overall pulse of the economy. In Australia, consumer confidence is correlated with household spending (on goods and services, as well as on housing and financial assets such as equities). Confidence is also a good gauge of labour market conditions, and as a result, is closely correlated with business confidence.
It is the aggregation of the weekly data through time which is the primary strength of high frequency series and the ANZ has done its research to show the strong correlations to the other economic indicators listed above.
It takes time for indicators such as these to gain traction and to move markets so don’t expect a big reaction with tomorrow’s release. But as the TD Monthly Inflation gauge has showed over the past few years these higher frequency surveys gain traction eventually and the ANZ’s correlation work suggests some great pointers in the survey to the path of economic growth.
Of most interest to the RBA and markets at the moment will be the relationship with employment and as the chart below shows the very encouraging pointer to an uptick in real household consumption growth which is so desperately needed to drive the domestic recovery and even out growth.