Australia leading index in August shows still very slow growth ahead

Australia Westpac Leading Index for August 2024 -0.05% m/m

• prior –0.03%

Westpac note, in summary:

• The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, declined from +0.04% in July to -0.27% in August.
• Commodity price fall a significant drag on momentum.
• Other components stable rather than weak.
• Signal points to activity remaining subdued through first half of 2025.

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The index signalling a potential slowdown in economic activity is troubling news. Australian economic growth is already extremely sluggish.

We have jobs and inflation data due in the next week from Australia. Early CPI previews I am seeing show expectations of the y/y rate moving down towards the centre of the RBA 2 – 3% target bad. Rate cuts maye may be on the horizon.