Judo Bank / S&P Global November Services PMI comes in at a dismal 46.0, which is its lowest reading (outside of periods of lockdown during the pandemic) in the survey's 8-year history
- prior 47.9
Composite is 46.2
- prior 47.6
Last week we had the flash reading for manufacturing and services
Followed by the final for the November manufacturing PMI:
Key points made in today's report:
- Incoming new business declines at fastest rate in over two years
- Marginally faster job creation recorded
- Price pressures intensify
Commentary from the report, in brief:
- “Complicating the economic picture was an improvement in the employment index in the services sector, indicative of continued strong demand for labour. A unique feature of the current cycle has been the resilience of labour demand despite the slowdown in overall activity. This looks to be more than the normal process of labour hoarding that occurs at the start of a cyclical downturn in economic activity.
- “While the RBA will welcome the further slowdown in business activity in November, the strong employment index and an increase in the price indexes is likely to keep them alert to inflation risks in 2024. Specifically, the RBA will need to remain attentive to the risk that inflation does not fall as quickly or by as much as they would like to see.
- “Both the input and output price indexes increased in November and remain above levels consistent with the RBA’s inflation target. This is consistent with sticky domestic inflation recorded by the Australian Bureau of Statistics in October where, excluding the impacts of Government rent subsidies, another strong increase in domestic inflation was recorded. “These results will most likely give the RBA Board further confidence that the economy is slowing into the end of 2023 but provides little comfort that inflation pressures will materially decline further over the first half of 2024.”
Bolding is mine. The RBA meet today but this is not going to shift them from an on-hold decision. If inflationary pressures are reflected in official data then further hikes are likely. February is the next meeting after today and, at this stage, it's a live meeting.
Earlier previews of today's meeting:
- RBA's December decision: cash rate likely to hold, questions arise for future increases
- RBA to keep cash rate unchanged next week - Reuters poll
The decision will be announced at 2.30pm local time in Sydney:
- 0330 GMT
- and 2230 US Eastern time (on Monday, 4 December 2023)
From the RBA website, the current cash rate inflation data.
