Tony Alexander

Economic Commentaries

Weekly Overview Nov. 7

Thursday November 7th 2013

Job numbers surged 1.2% last quarter giving 2.4% growth from a year ago. Employers should pay attention to the way labour availability will soon dry up bringing staffing issues and requiring a wages response. Page 1

Spread Your Risk

Lots of uncertainty remains regarding how rapidly NZ interest rates will rise. In the US data are firm but the Fed. might keep printing money for a long time if they decide to target unemployment lower than 6.5%. Allowing for all the uncertain factors borrowers should spread their risk with a mixture of floating and various fixed rate terms. Page 2

NZD Goes Back Up

With strong NZ jobs data, speculation regarding US money printing going for a long time, and the ending of a big bout of profit-taking, the NZD has gained near 2 US cents this week. Higher levels loom given the accelerating pace of growth in our economy whilst capacity availability worsens. Page 4

Aussie Economy Lifting?

This week some good data appeared on housing approvals and retail spending in Australia. With average house prices ahead 7.6% from a year ago and high auction clearance rates, we need to remind ourselves that the turning of the migration cycle with Australia will eventually reverse maybe 18 – 24 months from now. Page 4

Housing Listings Rise, As Do Prices

Listings are rising though the stock of houses for sale is still 12% down from a year ago and 21% from two years ago. Asking prices meantime have hit a record high. But the LVR rules are having a definite impact on lending with new home loan approvals in the past four weeks down by 15% from a year ago. Will this weakness persist? Page 7

We Like Rising House Prices

A net 13% of us do, up from a net 6% in October according to our latest BNZ Confidence Survey which will be released on Monday. Page 8