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.


Thursday December 15 2016
Australia Jobless Rate at 3-Month High of 5.7% in November
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate rose to 5.7 percent in November of 2016 from 5.6 percent in October and slightly above market consensus. It was the highest jobless rate since August as the economy added 39,100 jobs while the number of unemployed increased by 17,000.

In November, the seasonally adjusted labour force participation rate came in at 64.6 percent, compared to 64.4 in the prior month.

Employment increased 39,100 to 11,973,200: full-time employment rose 39,300 to 8,166,200 and part-time employment decreased by 200 to 3,807,000.

Unemployment increased 17,000 to 725,200. The number of unemployed persons looking for full-time work increased 15,100 to 512,100 and the number of unemployed persons only looking for part-time work decreased by 1,900 to 213,100.

Seasonally adjusted aggregate monthly hours worked in all jobs decreased 10.4 million hours to 1,663.3 million hours.


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.