NAB Economic Data: May 2024

The National Australia Bank (NAB) released key Australian economic and business insights yesterday for the month of May. This data comes at a crucial time, with the Reserve Bank of Australia (RBA) meeting for the next monetary policy decision next Tuesday.

From information gathered in NAB's Monthly Business Survey, it was found that:

- Business confidence fell 4pts (unrounded) to -3 index points.

- Trading conditions and profitability both fell 3pts

- Business conditions fell 1pt to +6 index points overall

- Labour cost growth rose to 2.3% in quarterly equivalent terms (from 1.5% in April)

- Product price growth lifted to 1.1% overall (from 0.8%)

Source: NAB

Additionally, in their Monthly Economic Data Insights release, it was reported that:

- Consumer spending, according to NAB’s transaction data, declined 0.3% m/m after a rise last month;

- With consumer spending now up 5.1% over the past 12 months.

Source: NAB

Next weeks RBA decision:

With this information in mind, coupled with the release last week of Australia's lagging GDP growth, economists from major banks are calling that rates won't be cut anytime soon.

Mr Oster, Chief Economist at NAB, said the Reserve Bank would likely keep interest rates on hold at 4.35 per cent, "for some time yet" as it navigates these "contrasting risks" (Yahoo).

NAB, Westpac, and the Commonwealth Bank, expect interest rates to stay on hold until cuts start late this year while ANZ revised its call on Tuesday and is now pencilling in a February 2025 start for an easing cycle.

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