Thursday March 16 2017
Australia Jobless Rate At 13-Month High of 5.9% In February
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly rose to 5.9 percent in February of 2017 from 5.7 percent in January while markets expected 5.7 percent. It was the highest jobless rate since January 2016, as the economy lost 6,400 jobs while the number of unemployed increased by 26,000.

In February, the seasonally adjusted labour force participation rate came in at 64.6 percent, the same as in the prior month and in line with consensus.

Employment decreased 6,400 to 11,998,800 and missing markets estimates of 16,000 gain: full-time employment increased 27,100 to 8,158,900 while part-time employment decreased 33,500 to 3,840,000.

Unemployment increased 26,000 to 748,100. The number of unemployed persons looking for full-time work increased 10,800 to 523,800 and the number of unemployed persons only looking for part-time work increased 15,100 to 224,300.

Seasonally adjusted aggregate monthly hours worked in all jobs decreased 20.5 million hours to 1,661.9 million hours.




Tuesday March 07 2017
Australia Keeps Cash Rate At Record Low Of 1.5%
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia left the cash rate steady at a record low of 1.5 percent during the meeting held on March 7th, as widely expected. While saying headline inflation is expected to be above 2 percent this year, policymakers judged holding the stance of policy unchanged would be consistent with sustainable growth in the economy and achieving the inflation target over time.

Excerpt from the statement by the governor, Philip Lowe:

The Australian economy is continuing its transition following the end of the mining investment boom, expanding by around 2½ per cent in 2016. Exports have risen strongly and non-mining business investment has risen over the past year. Most measures of business and consumer confidence are at, or above, average. Consumption growth was stronger towards the end of the year, although growth in household income remains low.

The outlook continues to be supported by the low level of interest rates. Financial institutions remain in a good position to lend. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.

Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country. The unemployment rate has been steady at around 5¾ per cent over the past year, with employment growth concentrated in part-time jobs. The forward-looking indicators point to continued expansion in employment over the period ahead.

Inflation remains quite low. With growth in labour costs remaining subdued, underlying inflation is likely to stay low for some time. Headline inflation is expected to pick up over the course of 2017 to be above 2 per cent, with the rise in underlying inflation expected to be a bit more gradual.

Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.




Thursday March 02 2017
Australia Trade Surplus Narrows To 3-Month Low
ABS | Rida Husna | rida@tradingeconomics.com

Australia's trade surplus unexpectedly narrowed 61 percent to AUD 1.30 billion in January of 2017 from a downwardly revised AUD 3.33 billion surplus in December and missing market expectations of AUD 3.8 billion. It was the smallest surplus in three months, as exports fell 3 percent from the prior month while imports rose 4 percent.

Between December 2016 and January 2017, goods and services credits fell AUD 0.95 billion (-3 percent) to AUD 31.8 billion. It is the first decline in seven months as non-monetary gold fell AUD 0.67 billion (-39 percent) and non-rural goods dropped AUD 0.40 billion (-2 percent). In contrast, rural goods rose AUD 57 million (1 percent) and net exports of goods under merchanting went up AUD 1 million (17 percent). Services credits rose AUD 72 million (1 percent).

Goods and services imports rose AUD 1.09 billion (4 percent) to AUD 30.49 billion. It is the biggest gain since September of 2015, due to rises in purchases of consumption goods (AUD 0.54 billion or 7 percent); intermediate and other merchandise goods (AUD 0.343 billion or 4 percent); capital goods (AUD 0.18 billion  or 3 percent) and non-monetary gold (AUD 22 million or 5 percent). Services debits increased AUD 3 million.




Wednesday March 01 2017
Australia GDP Growth Beats Expectations In Q4
ABS | Rida Husna | rida@tradingeconomics.com

The Australian economy expanded 1.1 percent in the fourth quarter of 2016, compared to a 0.5 percent contraction in the September quarter and beating markets expectations of a 0.7 percent growth. It was the strongest expansion since the March quarter 2016, mainly boosted by household spending, investment and net trade while government spending was flat.

The country now recorded 101 quarters between the June 1991 and the 2016 December quarter without two straight quarters of negative economic growth.

In the December quarter 2016, final consumption expenditure rose 0.7 percent. Household spending went up 0.9 percent, adding 0.5 percentage points to GDP growth. This was driven by a rise in food (1.2 percent), recreation and culture (1.2 percent) and insurance and other financial services (1.3 percent). Meanwhile, government expenditure was flat. 

Gross fixed capital formation increased by 2.6 percent, adding 0.6 percentage points to GDP. Public investment went up 7.7 percent, driven by defence (34.2 percent) and commonwealth public corporations (41.0 percent). Private investment rose 1.5 percent with non-dwelling construction up 2.3 percent. It was the first rise in non-dwelling construction since the June quarter 2014.

Exports of goods and services rose 2.2 percent. Exports of goods rose 2.6 percent, with non-rural exports up 2.6 percent, rural exports up 8.3 percent and non-monetary gold down 9.4 percent. Exports of services rose 0.6 percent. Imports of goods and services increased by 1.4 percent.  Imports of goods rose 1.2 percent, driven by a rise in capital goods (8.4 percent). In contrast, non-monetary gold fell 19.3 percent, followed by intermediate goods (-0.5 percent). Imports of services were up 2.3 percent. Net exports contributed 0.2 percentage points to GDP.

The change in total inventories was an increase of AUD 552 million in seasonally adjusted terms following a rise of AUD 1,228 million in the last quarter. This increase was driven by rises in wholesale trade and retail trade inventories. A run down in mining inventories of AUD 717 million partially offset the rise. It was the largest decline in mining inventories since June quarter 2008 and can be attributed to producers taking advantage of high prices for mining commodities during the quarter. The change in inventories detracted 0.2 percentage points from GDP growth.

By industry, agriculture, forestry and fishing  rose the most by 8.3 percent (driven by rises in grains, cotton and livestock production and there was a positive contributions from decreased input costs), followed by mining (3.4 percent, mainly due to a 4.7 percent rise in iron ore mining, a 4.4 percent rise in oil and gas extraction and a 3.2 percent increase in other mining), wholesale trade (3.0 percent, driven by rises in basic material wholesaling and motor vehicle and motor vehicle parts wholesaling), and professional, scientific and technical services (2.4 percent, driven by rises in both subdivisions). In contrast, a decline was seen for: manufacturing (-1.2 percent, largely due to a 7.4 percent fall in machinery and equipment and a 3.3 percent in metal products) and construction (-1.2 percent, driven by falls in heavy and civil engineering and construction services).

Through the year to the December quarter, the economy grew by 2.4 percent, faster than a 1.9 percent expansion in the September quarter and above consensus of a 1.9 percent growth. 

Real net national disposable income increased by 2.9 percent quarter-on-quarter. The terms of trade increased by 9.1 percent from the prior quarter, due to strong price increase in coal and iron ore. It was the fastest growth rate experienced in the terms of trade since June Quarter 2010. Compared to the December quarter 2015, the terms of trade rose 15.6 percent.




Thursday February 16 2017
Australia Jobless Rate Down To 5.7% In January
ABS | Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate fell to 5.7 percent in January of 2017 from 5.8 percent in December while markets expected 5.8 percent. The labor force participation rate dropped slightly while the number of unemployed decreased by 19,300.

In January, the seasonally adjusted labour force participation rate came in at 64.6 percent, compared to 64.7 percent in the prior month and slightly less than estimates of 64.7 percent.

Employment increased by 13,500 to 11,998,200 and higher than markets consensus of 10,000 : full-time employment decreased 44,800 to 8,125,700 and part-time employment increased by 58,300 to 3,872,500.

Unemployment decreased 19,300 to 720,200. The number of unemployed persons looking for full-time work decreased 16,000 to 511,000 and the number of unemployed persons only looking for part-time work decreased by 3,300 to 209,200.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 10.2 million hours to 1,682.7 million hours.


Tuesday February 07 2017
Australia Holds Cash Rate Steady At 1.5%
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia left the cash rate unchanged at a record low of 1.5 percent during the meeting held on February 7th, as expected. While highlighting economic growth over the next couple of years to be around 3 percent, boosted by further increases in resource exports amid the end of declining mining investment; policymakers said inflation is expected to remain low for some time.

Excerpt from the statement by the governor, Philip Lowe:

In Australia, the economy is continuing its transition following the end of the mining investment boom. GDP was weaker than expected in the September quarter, largely reflecting temporary factors. A return to reasonable growth is expected in the December quarter.

The Bank's central scenario remains for economic growth to be around 3 per cent over the next couple of years. Growth will be boosted by further increases in resource exports and by the period of declining mining investment coming to an end. Consumption growth is expected to pick up from recent outcomes, but to remain moderate. Some further pick-up in non-mining business investment is also expected.

The outlook continues to be supported by the low level of interest rates. Financial institutions remain in a position to lend. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.

Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country. The unemployment rate has moved a little higher recently, but growth in full-time employment turned positive late in 2016. The forward-looking indicators point to continued expansion in employment over the period ahead.

Inflation remains quite low. The December quarter outcome was as expected, with both headline and underlying inflation of around 1½ percent. The Bank's inflation forecasts are largely unchanged. The continuing subdued growth in labour costs means that inflation is expected to remain low for some time. Headline inflation is expected to pick up over the course of 2017 to be above 2 per cent, with the rise in underlying inflation expected to be a bit more gradual.

Conditions in the housing market vary considerably around the country. In some markets, conditions have strengthened further and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for a couple of decades. Borrowing for housing has picked up a little, with stronger demand by investors. With leverage increasing, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments.

Taking account of the available information, and having eased monetary policy in 2016, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.


Thursday February 02 2017
Australia Posts Largest Trade Surplus On Record
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade surplus widened 72 percent to AUD 3.51 billion in December 2016 from an upwardly revised AUD 2.04 billion surplus in November and beating market expectations of AUD 2.20 billion. It was the largest surplus on record, as exports rose by 5 percent from the previous month while imports advanced at a slower 1 percent.

Between November and December 2016, goods and services credits rose AUD 1.68 billion, or 5 percent, to AUD 32.63 billion. Exports rose for: Non-rural goods (AUD 1.25 billion, or 6 percent); non-monetary gold (AUD 0.32 billion, or 23 percent); rural goods (AUD 0.1 billion, or 3 percent); and net exports of goods under merchanting (AUD 1 million, or 20 percent). Services credits rose AUD 6 million.

Goods and services imports rose AUD 0.21 billion, or 1 percent, to AUD 29.12 billion. Imports rose for: Consumption goods (AUD 0.16 billion, or 2 percent); intermediate and other merchandise goods (AUD 0.13 billion, or 2 percent); and non-monetary gold (AUD 4 million, or 1 percent). By contrast, purchases of capital goods fell AUD 0.13 billion, or 2 percent. Services debits rose AUD 42 million, or 1 percent.

Considering 2016 full year, the trade deficit dropped 63 percent to AUD 13.6 billion from AUD 37.0 billion in 2015, as goods and services credits increased AUD 13.3 billion, or 4 percent, while goods and services debits fell AUD 10.1 billion, or 3 percent.



Wednesday January 25 2017
Australia Inflation Rate Slightly Below Estimates in Q4
ABS l Rida Husna | rida@tradingeconomics.com

Consumer prices in Australia rose 1.5 percent through the year to the fourth quarter of 2016 from 1.3 percent in the September quarter while markets expected a 1.6 percent rise. It was the highest inflation rate since the December quarter 2015, as a faster increase in prices of food and housing offset a drop in cost of transport.

Year-on-year, cost increased for: food and non-alcoholic beverages (1.8 percent from 1.5 percent in the September quarter), alcohol and tobacco (5.9 percent from 5.7 percent), housing (1.9 percent from 1.8 percent), furnishing, household equipment and services (0.6 percent from 1.9 percent), health (3.7 percent from 3.9 percent), education (3.3 percent from 3.3 percent) and insurance and financial services (2.7 percent from 2.9 percent). In contrast, cost declined for: clothing and footwear (-0.9 percent from 1.2 percent), financial services (2.9 percent from 2.4 percent), transport (-0.3 percent from 3.4 percent), communication (-5.9 percent from -7.5 percent) and recreation and culture (-0.5 percent from 0.6 percent). 

RBA Trimmed Mean CPI rose 1.6 percent year-on-year in the December quarter 2016, after gaining 1.7 percent in the preceding three quarters and slightly below consensus of a 1.7 percent gain. Quarter-on-quarter, the index increased 0.4 percent, the same as in the third quarter while markets estimated a 0.5 percent rise. RBA Weighted Mean CPI rose 1.5 percent year-on-year in the three months to December, up from a 1.3 percent growth in the third quarter and slightly above expectations of a 1.4 percent rise. For 2016, Australia's central bank targets core inflation of between 2.0 percent to 3.0 percent on average. 

On a quarterly basis, consumer prices rose 0.5 percent, following a 0.7 percent rise in the previous three month period and below market expectations of a 0.7 percent increase. The most significant price rises in the December quarter were tobacco (7.4 percent), automotive fuel (6.7 percent) and restaurant meals (+1.1 percent). These rises were partially offset by falls in furnishings, household equipment and services (-0.8 percent) and communication (-0.8 percent). 





Thursday January 19 2017
Australia Jobless Rate Up To 6-Month High of 5.8%
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate rose to 5.8 percent in December of 2016 from 5.7 percent in November. The figure came in slightly above market expectations of 5.7 percent to hit the highest level since June, as the economy added 13,500 jobs while the number of unemployed increased by 14,700.

In December, the seasonally adjusted labour force participation rate was up to 64.7 percent from 64.6 in the prior month.

Employment increased by 13,500 to 11,985,900 and higher than markets consensus of 10,000 : full-time employment rose 9,300 to 8,176,500 and part-time employment increased by 4,200 to 3,809,500.

Unemployment increased 14,700 to 741,100. The number of unemployed persons looking for full-time work increased 15,000 to 528,900 and the number of unemployed persons only looking for part-time work decreased by 300 to 212,200.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 6.9 million hours to 1,670.4 million hours.


Friday January 06 2017
Australia Posts First Trade Surplus in 32 Months in November
ABS l Rida Husna | rida@tradingeconomics.com

Australia unexpectedly reported a trade surplus of AUD 1.24 billion in November of 2016, compared to a downwardly revised AUD 1.12 billion deficit in October and beating market expectations of a AUD 0.5 billion gap. It was the first trade surplus since March 2014, mainly driven by a surge in exports while imports were flat.

The monthly change in the trade balance was recorded at AUD 2.36 billion, the largest positive turnaround since April 2010. 

Between October and November 2016, in seasonally adjusted terms, goods and services credits rose AUD 2.32 billion (+8 percent) to a record high of AUD 30.10 billion. Non-rural goods rose AUD 2.01 billion (+12 percent) and rural goods rose AUD 0.59 billion (+17 percent). Non-monetary gold fell AUD 0.31 billion (-18 percent). Net exports of goods under merchanting remained steady at AUD 0.005 billion. Services credits rose AUD 0.03 billion.

Goods and services debits fell AUD 0.04 billion to AUD 28.84 billion. Capital goods fell AUD 0.14 billion (-2 percent) and consumption goods fell AUD 0.03 billion. Intermediate and other merchandise goods rose AUD 0.01 billion (+1 percent) and non-monetary gold rose 0.02 billion (+4 percent). Services debits rose AUD 0.02 billion.