Bankwest releases monthly snapshot

Whilst the Reserve Bank’s next move is still likely to be up, the chance of a cut has increased in the last few months, according to Bankwest’s monthly economic and financial market snapshot.

The snapshot gives a broad review of recent economic data, including sentiment, house prices and the labour market.

The headline unemployment rate was up 0.4 per cent in July, indicating a weak jobs market, but the report suggests that figure overstates the softness of the labour market.

Nonetheless, trend unemployment is up 1.3 per cent from its nadir in March 2011, at 6.1 per cent, representing a 12 year high.

As reported by Business News in July, business confidence has returned to pre-budget levels, and conditions have improved to match confidence.

The August review of consumer confidence was also up, but the bank says the release of unemployment data during the survey period may have an untold impact on sentiment.

Despite declines in food and clothing trade, retail sales were up 3 per cent over the 12 months to June in real terms, but contracted 0.2 per cent in the final quarter.

Residential building approvals have moderated from a 20 year peak in January this year, with construction yet to commence or underway, contributing to strength in that sector.

That strength has ameliorated the effects of the resources boom construction slow down, but in the rest of the economy growth is sober.

Bond yields are also being kept low thanks to a movement towards safety during recent geopolitical tensions.