Various Economic Indicators

Retail Sales
Sales jumped 1% in May (third month of rises) up from 0.3% in April. The sales reflect optimism coming from the 'green shoots' period and a second round of government handouts. As unemployment starts to trend up however these figures should start to trend down.

Building Approvals
Building approvals however were not so positive. They dropped a big 12.5% in May. This is the worst monthly decline in a year. Compared with a year ago approvals are down 22.4%. Housing finance has however been trending upwards so these figures could be a one month anomaly.

Skilled Job Vacancies
The Dept. of Education, Employment and Workplace Relations skilled vacancies index fell 3.7% in June. It's 61.5% lower than in June 2008. The fall in skilled vacancies was widespread with decreases evident in most professions monitored by the department.

Manufacturing
Manufacturing activity is still contracting but the pace of contraction is slowing. The Australian Industry Group / PWC Performance of Manufacturing index rose by 0.9 index points in June to 38.4 which is below 50 - the crossover point from contraction to expansion.

USA
Manufacturing shrank at the slowest pace since Aug 08 - as above the relevant index went up but is still below 50 so is in contracting.

US housing - there are signs this crucial element of the economy is starting to stabilise. Last week figures showed existing home sales rose 2.4% in May and contract signing (a leading indicator) rose 0.1% in May after previously rising 7.1%.

Respected US economist, Martin Feldstein, stated in a Bloomberg radio interview that "we're going to see a temporary substantial improvement" in the economy but that it will be "going down again" into 2010.


My take on these and other recent figures is that the significant measures taken my governments around the world have stopped the free fall we were in and brought some stability. This doesn't mean that we're growing however and most developed countries will remain in a recessionary state during the course of this year and Australia could very well join them.