Thursday December 08 2016
Australia Trade Deficit Widens in October
ABS l Rida Husna | rida@tradingeconomics.com

Australia reported a trade deficit of AUD 1.54 billion in October of 2016, an increase of 21 percent from an upwardly revised AUD 1.27 billion deficit in September. Figure came below market expectations of a AUD 0.80 billion gap, as exports rose less than imports.

Between September and October 2016, in seasonally adjusted terms, goods and services exports rose  AUD 0.39 billion (+1 percent) to AUD 27.63 billion. Non-rural goods rose AUD 0.22 billion (+1 percent) and non-monetary gold rose AUD 0.2 billion (+13 percent). Rural goods fell AUD 0.15 billion (-4 percent) and net exports of goods under merchanting fell AUD 0.003 billion (-6 percent). Services credits rose AUD 0.12 billion (2 percent).

Goods and services imports rose AUD 0.6 billion (+2 percent) to AUD 29.17 billion. Capital goods rose AUD 0.49 billion (+10 percent), consumption goods rose AUD 0.1 billion (+1 percent) and intermediate and other merchandise goods rose AUD 0.097 billion (+1 percent). Non-monetary gold fell AUD 0.16 billion (-26 percent). Services debits rose AUD 0.14 billion (+2 percent).




Wednesday December 07 2016
Australia GDP Contracts for 1st Time in 5-1/2-Years in Q3
ABS l Rida Husna | rida@tradingeconomics.com

The Australian economy unexpectedly shrank 0.5 percent in the third quarter of 2016, compared to an upwardly revised 0.6 percent growth in the June quarter and missing market consensus of a 0.3 percent expansion. It was the first contraction since the March quarter 2011 and the fastest fall since the December quarter 2008, dragged down by investment and net trade.

Gross fixed capital formation dropped by 2.7 percent, substracting 0.7 percentage points from growth. Private investment fell 0.8 percent, driven by a 1.4 percent decline in dwelling, a 4.9 percent fall in ownership transfer costs and a 1.3 percent drop in non-dwelling construction. Private investment in new buildings detracted 0.3 percentage points from GDP growth, while new engineering and new and used dwellings detracted 0.2 and 0.1 percentage points respectively. Public investment decreased 10.4 percent and detracted 0.5 percentage points from growth, as state and local general government fell 13.0 percent and total national general government declined by 16.8 percent.

Exports of goods and services went up 0.3 percent while imports of goods and services grew at a faster 1.3 percent. Net exports detracted 0.2 percentage points from GDP growth. The change in total inventories was an increase of AUD 1,053 million in seasonally adjusted terms compared to a rise of AUD 435 million in the last quarter, contributing 0.1 percentage points to GDP. This increase was driven by a rise in wholesale trade and retail inventories.

In the September quarter, final consumption expenditure grew by 0.3 percent. Household spending  rose 0.4 percent, driven by a rise in hotels, cafes and restaurants: +2.2 percent and insurance and other financial services: +1.3 percent. Meanwhile, government expenditure shrank 0.2 percent.

By industry, mining declined by 0.8 percent (due to a drop in exploration and mining support services: -7.2 percent, other mining: -3.1 percent, oil and gas extraction: -1.3 percent and coal mining: -0.5 percent), followed by construction (-3.6 percent, driven by falls in all subdivisions), retail trade (-0.8 percent, due to a drop in food retailing) and rental, hiring and real estate services (-2.4 percent, driven by property operators and real estate services). In contrast, growth was seen in agriculture, forestry and fishing (+7.5 percent, driven primarily by rises in grains, cotton and livestock output) and information media and telecommunications (+1.6 percent, driven by rises in telecommunications and internet services).

Through the year, the economy grew by 1.8 percent, slowing sharply from a 3.3 percent expansion in the June quarter while market estimated a 2.5 percent growth. It was the weakest growth since the third quarter 2009.

Real net national disposable income increased by 0.8 percent quarter-on-quarter, up from a 0.5 percent rise in the June quarter, largely supported by a 4.5 percent increase in terms of trade. The terms of trade experienced its first consecutive quarterly increase since September quarter 2011.





Tuesday December 06 2016
Australia Holds Cash Rate Steady at 1.5%
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia decided to leave the cash rate unchanged at a record low of 1.5 percent during the meeting held on December 6th, as expected. While saying the economy is continuing its transition following the mining investment boom, policymakers judged some slowing in the year-ended growth rate is likely, before it picks up again.

Excerpt from the statement by the governor, Philip Lowe:

In Australia, further increases in exports of resources are expected as completed projects come on line. The outlook for business investment remains subdued, although measures of business sentiment remain above average.

Labour market indicators continue to be somewhat mixed. The unemployment rate has declined this year, although some measures of labour underutilisation are little changed. There continues to be considerable variation in employment outcomes across the country. Part-time employment has been growing strongly, but employment growth overall has slowed. The forward-looking indicators point to continued expansion in employment in the near term.

Inflation remains quite low. The continuing subdued growth in labour costs means that inflation is expected to remain low for some time, before returning to more normal levels.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are assisting the economy to make the necessary adjustments, though an appreciating exchange rate could complicate this.

Conditions in the housing market have strengthened overall, although they vary considerably around the country. In some markets, prices are rising briskly, while in others they are declining. Housing credit has picked up a little, although turnover of established dwellings is lower than it was a year ago. Supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.

Taking account of the available information, and having eased monetary policy earlier in the year, 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 November 17 2016
Australia Jobless Rate Steady at 5.6% in October
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate stood at 5.6 percent in October of 2016, the same as in September and in line with market expectations. The jobless rate stayed at the lowest level since September 2013, as the the labor force participation was unchanged while the number of unemployed decreased by 2,000.

In October, the seasonally adjusted labour force participation rate came in at 64.4 percent, similar to the previous month's figure.

Employment increased 9,800 to 11,938,900: full-time employment rose 41,500 to 8,126,390 and part-time employment decreased by 31,700 to 3,812,000.

Unemployment fell 2,000 to 705,100. The number of unemployed persons looking for full-time work increased 700 to 494,300 and the number of unemployed persons only looking for part-time work decreased by 2,700 to 210,800.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 14.3 million hours to 1,674.8 million hours.




Thursday November 03 2016
Australia Trade Gap Smallest in 21 Months
ABS l Rida Husna | rida@tradingeconomics.com

Australia reported a trade deficit of AUD 1.23 billion in September of 2016, a decrease of 35 percent from a downwardly revised AUD 1.89 billion deficit in August and below market estimates of a AUD 1.70 billion gap. It was the smallest trade deficit since December 2014, as exports rose while imports fell.

Between August and September 2016, in seasonally adjusted terms, goods and services exports rose AUD 0.43 billion (+2 percent) to AUD 27.25 billion. Non-rural goods rose AUD 0.58 billion (+4 percent) and rural goods rose AUD 0.17 billion (+5 percent). Non-monetary gold fell AUD 0.35 (-19 percent). Net exports of goods under merchanting remained steady at AUD 0.047 billion. Services credits rose AUD 0.03 billion.

Goods and services debits fell AUD 0.24 billion (-1 percent) to AUD 28.48 billion. Consumption goods fell AUD 0.2 billion (-3 percent), non-monetary gold fell AUD 0.12 billion (-17 percent) and capital goods fell AUD 0.08 billion (-1 percent). Intermediate and other merchandise goods rose AUD 0.18 billion (+2 percent). Services debits rose AUD 0.003 billion.


Tuesday November 01 2016
Australia Keeps Cash Rate Steady at record Low of 1.5%
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia decided to leave the cash rate unchanged at a record low of 1.5 percent during the meeting held on November 1st, as expected. While saying low interest rates have been supporting domestic demand, policymakers projected the economy is to grow at close to its potential rate over the next year and inflation is expected to pick up gradually over the next two years.

Excerpt from the statement by the governor, Philip Lowe:

In Australia, the economy is growing at a moderate rate. The large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports. Household consumption has been growing at a reasonable pace, but appears to have slowed a little recently. Measures of household and business sentiment remain above average.

Labour market indicators continue to be somewhat mixed. The unemployment rate has declined this year, although there is considerable variation in employment growth across the country. Part-time employment has been growing strongly, but employment growth overall has slowed. The forward-looking indicators point to continued expansion in employment in the near term.

Inflation remains quite low. The September quarter inflation data were broadly as expected, with underlying inflation continuing to run at around 1½ per cent. Subdued growth in labour costs and very low cost pressures elsewhere in the world mean that inflation is expected to remain low for some time.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are assisting the economy to make the necessary adjustments, though an appreciating exchange rate could complicate this.

The Bank's forecasts for output growth and inflation are little changed from those of three months ago. Over the next year, the economy is forecast to grow at close to its potential rate, before gradually strengthening. Inflation is expected to pick up gradually over the next two years.

In the housing market, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments. Turnover in the housing market and growth in lending for housing have slowed over the past year. The rate of increase in housing prices is also lower than it was a year ago, although prices in some markets have been rising briskly over the past few months. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.

Taking account of the available information, and having eased monetary policy at its May and August meetings, 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.


Wednesday October 26 2016
Australia Inflation Rises More than Expected in Q3
ABS l Rida Husna | rida@tradingeconomics.com

Consumer prices in Australia rose 1.3 percent through the year to the third quarter of 2016 from 1.0 percent in the previous three month period. The inflation rate came above market consensus of a 1.1 driven mostly by rise in cost of food and housing.

Year-on-year, cost increased for: food and non-alcoholic beverages (+1.5 percent from -0.1 percent in the June quarter), alcohol and tobacco (+5.7 percent from +5.9 percent); clothing and footwear (+1.2 percent from -0.2 percent), housing (+1.8 percent from +1.3 percent); furnishing, household equipment and services (+1.9 percent from +1.6 percent), health (+3.9 percent from +4.5 percent), recreation & culture (+0.6 percent from +0.8 percent), education (+3.3 percent from +3.3 percent) and insurance and financial services (+2.9 percent from +2.4 percent). In contrast, cost declined for: transport (-3.4 percent from -2.8 percent) and communication (-7.5 percent from -7.2 percent). 

RBA Trimmed Mean CPI rose 1.7 percent year-on-year in the September quarter of 2016, the same pace as in the preceding two quarters and in line with estimates. Quarter-on-quarter, the index increased 0.4 percent, down from 0.5 percent in the second quarter. RBA Weighted Mean CPI rose 1.3 percent year-on-year in the three months to September, unchanged from the second quarter. 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 0.7 percent, following a 0.4 percent rise in the previous three month period and above market expectations of 0.5 percent. It was the highest inflation rate since June quarter of 2015 driven by a 1.7 percent rise in cost of food and non-alcoholic beverages. The main contributors to the rise in the food and non-alcoholic beverages group were fruit (+19.5%) and vegetables (+5.9% )as adverse weather conditions, including floods, in major growing areas, impacted supply. Prices also increased for electricity (+5.4 percent) and tobacco (+2.3 percent). Partially offsetting these rises were falls in communication (-2.3 percent) and fuel (-2.9 percent). 





Thursday October 20 2016
Australia Jobless Rate Drops to 3-Year Low in September
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly dropped to 5.6 percent in September of 2016, compared to an upwardly revised 5.7 percent in August and below market estimates. It was the lowest jobless rate since September 2013 as the labor force participation dropped while the economy lost 9,800 jobs.

In September, the seasonally adjusted labour force participation rate came in at 64.5 percent from 64.7 percent in the prior month.

Employment fell 9,800 to 11,947,200: full-time employment decreased 53,000 to 8,105,300 and part-time employment increased by 43,200 to 3,841,900.

Unemployment decreased 12,500 to 705,100. The number of unemployed persons looking for full-time work decreased 7,400 to 492,300 and the number of unemployed persons only looking for part-time work decreased by 5,100 to 212,800.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 4.0 million hours to 1,660.0 million hours.


Thursday October 06 2016
Australia Trade Gap Smallest in 4 Months
ABS l Rida Husna | rida@tradingeconomics.com

Australia reported a trade deficit of AUD 2.01 billion in August of 2016, a decrease of 5.0 percent from a downwardly revised AUD 2.12 billion deficit in July while market estimates a gap of AUD 2.30 billion. It was the smallest trade deficit since April as exports and imports were flat.

Between July and August 2016, in seasonally adjusted terms, goods and services exports rose AUD 0.01 billion to AUD 26.86 billion. Non-rural goods rose AUD 0.41 billion (+3.0 percent) and rural goods rose AUD 0.036 billion (+1 percent). Non-monetary gold fell AUD 0.52 billion (-22 percent). Net exports of goods under merchanting remained steady at AUD 0.047 billion. Services credits rose AUD 0.09 billion (+1 percent).

Goods and services debits fell AUD 0.1 billion to AUD 28.87 billion. Intermediate and other merchandise goods fell AUD 0.3 billion (-3 percent), capital goods fell AUD 0.08 billion (-1 percent) and consumption goods fell AUD 0.016 billion. Non-monetary gold rose AUD 0.22 billion (+42 percent). Services debits rose AUD 0.07 billion (+1 percent).


Tuesday October 04 2016
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 October 4th, as expected. While saying low interest rates have been supporting domestic demand, policymakers judged the economy is continuing to grow at a moderate pace.

Excerpt from the statement by the new governor, Philip Lowe:

In Australia's economy, the large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports. Household consumption has been growing at a reasonable pace, but appears to have slowed a little recently. Measures of household and business sentiment remain above average.

Labour market indicators have been somewhat mixed. The unemployment rate has fallen further, although there is considerable variation in employment growth across the country. Part-time employment has been growing strongly, while growth in full-time employment has been subdued. The forward-looking indicators point to continued expansion in employment in the near term.

Inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.

Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.

Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. Growth in lending for housing has slowed over the past year. Turnover in the housing market has declined. The rate of increase in housing prices is lower than it was a year ago, although some markets have strengthened recently. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.

Taking account of the available information, and having eased monetary policy at its May and August meetings, 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.