ECONOMIC WEEK AHEAD: Quarterly employment data in the spotlight
Economists are looking forward to a relatively quiet week in terms of data releases but they will have their eyes on the latest employment statistics and producer inflation numbers.
On Tuesday, Statistics SA will release the first quarter of 2018 Quarterly Employment Statistics (QES). There are two official sources of jobs figures: the QES, which is establishment based, and the Quarterly Labour Force Survey (QLFS). The QES, however, does not provide information on the demographic profile, education level and hours of work.
According to the QLFS out earlier in 2018, first-quarter unemployment was unchanged at 26.7%. "With 81,000 jobs created in the fourth quarter of 2018, we expect a moderation in the first quarter as much of the hiring in the final quarter is seasonal," said First National Bank chief economist Mamello Matikinca. "Weak sectors, such as mining, manufacturing and construction, are likely to lead the erosion, while an anticipated drop in the trade sector will likely reflect a post-Black Friday and festive season staff normalisation," she said.
Investec economist Lara Hodes expected QES to continue to reflect weak labour market dynamics. "A notable uptick in investment, which would lift potential GDP growth, is required to enhance employment rates," she said.
On Thursday, Stats SA will release the producer price index (PPI) for May, which is expected to moderate as consumer inflation has done, with CPI inflation easing to 4.4% year on year in May from April’s 4.5%, despite higher VAT.
Investec expects the May PPI update to moderate to 4.2% year on year, from 4.4% in April. Upward pressure from the fuel price would have continued, but sustained manufactured food price disinflation should partly counter this, said Hodes.
Matikinca expects May’s PPI to be unchanged from 4.4% in April, as producers try to maintain momentum in a sluggish economy.
On Friday, the Reserve Bank releases private sector credit figures and the South African Revenue Service will announce balance of trade figures for May.
The growth rate in private sector credit extension fell to 5.1% in April, after three quarters of growth, on the back of a decline in credit to the corporate sector.
Investec and FNB expect the May number to be slightly up, at 5.4%.
Correction: 25 June 2018
This article was amended to correct the May CPI rate, which was misstated due to an editing error.