The Economy: Still Mixed, But The Investment Boom Powers On

September 5, 2011 10:14 PM EDT

As we once again approach a monthly Reserve Bank board meeting, the Australian economy is not providing any guidance for the central bank, or individuals.

The RBA board meets next Tuesday in Perth. On Wednesday Governor Glenn Stevens speaks at a dinner in Perth.

Both his post-board meeting statement and the speech will be closely watched for signs of any change in the RBA's current stance of waiting to see what happens in the economy.

Consumer and business confidence levels remain weak, but that is at odds with some of the July figures now emerging.

Complicating matters next week is the release of the June quarter economic growth figures on Wednesday with some early forecasts around the 0.9% (GDP contracted by 1.2% in the March quarter).

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The Australian unemployment data is out next Thursday and some economists reckon the 5.1% rate will be pushed higher.

It wouldn't surprise if there's a change in market sentiment against an interest rate cut in a week's time.

Retail sales for July showed a surprising rise of 0.5%, stronger than most forecasts, but industry spokespeople dismissed the rise as a one-off.

And official figures out yesterday confirmed the investment boom remains on track and if anything is accelerating.

Earlier in the week July figures on new home building were very weak, building approvals fell for private dwellings (the major part of approvals each month), house prices fell and RBA data showed home lending was running at close to all time lows in July.

But so far, there's no single figure that points to a rate cut being a certainty next Tuesday.

So the next really important RBA meeting is the Melbourne Cup day meeting in November when the RBA will have the September quarter inflation data available to consider.

The new private investment figures from the Australian Bureau of Statistics were the most important figures released this week.

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