Via Westpac:
Details
Company profits, +1.9% vs forecast market 2.8% & Westpac 1.3%
Company profits adjusted: 1.2%, in line with Westpac forecast 1.3%
Wage incomes (i.e. employment x wages): 0.9%, in line with our expectations
Inventories: flat, a downside surprise vs forecast (market 0.4% & Westpac 0.5%)
Inventories contribution: -0.3ppts vs forecast Westpac -0.1ppts
Comment
The income information was robust and consistent with our expectations and consistent with our GDP forecast of 0.7%
Profits are up on higher commodity prices, with mining profits +3.4%, in line with expectations. Non-mining profits advanced modestly.
Wage incomes grew robustly, consistent with labour market data, which was positive, with employment +0.7% in the period, including full-time +0.8%.
However, the expenditure estimate of GDP is tracking materially below our forecast of 0.7%. We had downside risks ahead of today and inventories have disappointed.
Tomorrow, additional information around public demand and net exports will provide some further colour around the risks to our forecast.
Looks like a 0.4 with downside risks is now consensus. With a 0.7 to drop out that would begin the big forthcoming downgrade to Aussie GDP.
