Thursday January 18 2018
Australia Jobless Rate Rises Unexpectedly to 5.5%
Australian Bureau of Statistics l Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly rose to 5.5 percent in December 2017 from a near five-year low of 5.4 percent in November and above market consensus of 5.4 percent.

In December, the number of unemployed rose by 20.5 thousand to 730.6 thousand, as those looking for full-time work increased by 9.9 thousand to 501.8 thousand and those looking for only part-time work went up by 10.6 thousand to 228.8 thousand.
 
Employment went up by 34.7 thousand to 12.44 million, way above estimates of a 9 thousand increase. It was the 15th straight month of gains in employment, the longest such streak since 1993, with full-time employment rising by 15.1 thousand to 8.52 million and part-time employment advancing by 19.5 thousand to 3.92 million. The seasonally adjusted employment rate increased 0.1 percentage points to 62 percent, the highest level since March 2012.
 
The labour force participation rate went up 0.2 percentage points to 65.7 percent, beating expectations of 65.4 percent and hitting the highest level since January 2011.
 
Seasonally adjusted monthly hours worked in all jobs increased 4.2 million hours (0.2 percent) to 1,738.4 million hours.




Friday January 05 2018
Australia Trade Gap Widens in November
ABS l Rida Husna | rida@tradingeconomics.com

Australia' trade deficit widened to AUD 0.63 billion in November of 2017 from a downwardly revised AUD 0.30 billion in the prior month and missing market expectations of a AUD 0.55 billion surplus. Imports rose slightly while exports were unchanged.

Imports rose 1 percent from the previous month to an all-time high of AUD 32.48 billion, as purchases rose for: consumption goods (3 percent to AUD 8.55 billion); capital goods (3 percent to AUD 6.37 billion), mainly telecommunications equipment (18 percent to AUD 1.20 billion); and intermediate goods (1 percent to AUD 9.69 billion), mainly processed industrial supplies (3 percent to AUD 2.82 billion). Also, imports of services increased 1 percent to AUD 7.58 billion, mainly due to higher purchases of travel (1 percent to AUD 3.84 billion), transport (1 percent to AUD 1.51 billion) and other services (1 percent to AUD 2.18 billion). By contrast, imports of fuels and lubricants dropped 3 percent to AUD 2.56 billion and those of non-monetary gold fell 25 percent to AUD 301 million.

Meanwhile, exports were unchanged at AUD 31.85 billion. Sales rose for: non-rural goods (2 percent to AUD 19.01 billion), mainly metals (26 percent to AUD 1.00 billion), other mineral fuels (5 percent to AUD 2.75 billion), metal ores and minerals (1 percent to AUD 6.99 billion), and other manufactures (5 percent to AUD 1.70 billion); and rural goods (1 percent to AUD 3.98 billion), mainly other rural (4 percent to AUD 2.02 billion) and wool and sheepskins (6 percent to AUD 393 million). Also, exports of services went up 2 percent  to AUD 7.38 billion, due to travel sales (3 percent to AUD 4.92 billion). On the other hand, sales of non-monetary gold dropped 23 percent to AUD 1.44 billion and net exports of goods under merchanting were unchanged at AUD 53 million.

Considering January to November, the trade balance posted a surplus of AUD 12.17 billion, compared to a AUD 18.96 billion deficit in the same period of 2016.




Thursday December 14 2017
Australia Jobless Rate Holds at 56-Month Low of 5.4%
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate came in at 5.4 percent in November of 2017, the same as in the preceding month and in line with market consensus. The jobless rate remained at its lowest since February 2013, as the economy added 61,600 jobs while the number of unemployed increased by 4,100.

In November, the number of unemployed rose by 4,100 to 707,700. The number of unemployed persons looking for full-time work increased by 2,500 to 489,900 and the number of unemployed persons only looking for part-time work went up by 1,700 to 217,800.

Employment increased by 61,600 to 12,403,000, the largest rise since October 2015 and way above estimates of a 19,200 increase: Full-time employment rose by 41,900 to 8,501,900 while part-time employment increased by 19,700 to 3,901,100.

The labour force participation rate rose to 65.5 percent from 65.2 percent in the preceding three months and beating expectations of 65.1 percent. 

Seasonally adjusted aggregate monthly hours worked in all jobs increased 9.8 million hours (0.6 percent) to 1,740.9 million hours. Meantime, the seasonally adjusted employment to population ratio increased to 61.9 from 61.7 in October.


Thursday December 07 2017
Australia Trade Surplus Smallest in 6 Months
ABS | Rida Husna | rida@tradingeconomics.com

Australia's trade surplus narrowed 93 percent to AUD 0.1 billion in October of 2017 from a downwardly revised AUD 1.60 billion in the prior month and way below market expectations of AUD 1.4 billion. It was the smallest trade surplus since April, as exports declined by 3 percent from a month earlier to AUD 31.87 billion while imports went up 2 percent to AUD 31.77 billion.

Sales of non-rural goods (bulk commodities and non-bulk commodities) fell by 5 percent to AUD 18.62 billion, mainly due to metal ores and minerals (-10 percent); metals (-16 percent); coal, coke and briquettes (-3 percent). 

Exports of rural goods decreased by 2 percent to AUD 85 million, mainly due to meat and meat preparations (-6 percent) and other rural (-2 percent).

Sales of non-monetary gold (gold which is not owned by monetary authorities and can be in the form of bullion, including coins, ingots or bar with a purity at least 995 parts per thousand) jumped by 24 percent to AUD 1.86 billion. 

Net exports of goods under merchanting increased by 25 percent to AUD 60 million.

Exports of services dropped by 2 percent  to AUD 7.31 billion, mainly due to tourism related services (2 percent).

Purchases of intermediate and other merchandise goods went up 4 percent to AUD 9.259billion. 

Imports of consumption goods increased by 2.0 percent to AUD 8.4 billion. The main components contributing to the rise were food and beverages, mainly for consumption (10 percent) and textiles, clothing and footwear (5 percet).  

Meanwhile, imports of non-monetary gold went up by 4 percent to AUD 401 million.

Purchases of capital goods declined by 2 percent to AUD 6.03 billion, mainly driven by industrial transport equipment n.e.s (8 percent); civil aircraft and confidentialised items (17 percent) and capital goods n.e.s (8 percent). Partly offsetting these falls were telecommunications equipment (11 percent) and ADP equipment (4 percent).

Imports of services increased by 2 percent to AUD 7.39 billion. The main component contributing to the rise were transport (7 percent) and travel (1 percent). Partly offsetting these rises was other services (-1 percent). 

Considering January to October 2017, trade surplus came in at AUD 13.30 billion, compared to a AUD 21.37 billion deficit in the same period of the preceding year.


Wednesday December 06 2017
Australia Q3 GDP Growth Slows to 0.6%
ABS | Rida Husna | rida@tradingeconomics.com

The Australian economy advanced 0.6 percent in the September quarter of 2017, following an upwardly revised 0.9 percent growth in the previous quarter and slightly below market consensus of a 0.7 percent expansion. Positive contributions from non-dwelling construction and changes in inventories were unable to offset weaker domestic demand and foreign trade.

In the three months to September, non-dwelling construction added 0.9 percentage points to growth, exports added 0.4 percentage points, household consumption added 0.1 percentage points and government spending gave no contribution to growth. Meantime, changes in inventories added 0.2 percentage points to growth.

Final consumption expenditure rose 0.2 percent. Household spending increased by 0.1 percent, driven by rises in insurance and other financial services (1.3 percent); rent and other dwelling services (0.6 percent) and food (1.0 percent). Offsetting the rise was health (-1.0 percent), hotels cafes and restaurants (-0.9 percent), and recreation and culture (-0.6 percent).  Government final consumption expenditure rose by 0.2 percent. State and local government consumption grew 0.4 percent, while national government consumption contracted by 0.1 percent.

Gross fixed capital formation expanded by 1.8 percent. Public investment decreased 7.5 percent, driven by state and local general government (-15.4 percent). This was driven by the acquisition of the Royal Adelaide Hospital from the private sector last quarter. Private investment increased by 4.5 percent, due to non-dwelling construction (18.4 percent) and machinery and equipment (1.9 percent). Partially offsetting the rise was dwelling,  which fell 1.0 percent. 

Exports of goods and services grew by 1.9 percent. Exports of goods increased by 2.1 percent, with non-rural exports up 2.7 percent and rural exports up 3.4 percent. Exports of services rose 1.5 percent. Imports of goods and services also went up by 1.9 percent.  Imports of goods rose 1.8 percent, driven by a rise in capital goods (6.6 percent). Imports of services were up 2.2 percent. 

The changes in total inventories was an icrease of AUD 506 million in seasonally adjusted terms following a fall of AUD 273 million in the prior quarter. The increase was driven by a build up in manufacturing inventories, the second consecutive quarterly increase and the largest since September quarter 2010. Offsetting the increase was a decrease in mining inventories.

By industry, mining rose 1.1 percent, driven by iron ore mining (2.9 percent), other mining (2.8 percent). Manufacturing went up 1.5 percent, with mixed results across the five sub-categories. Electricity, gas, water and waste services increased by 1.9 percent, due to a rise in electricity supply (2.3 percent). Construction rose 0.6 percent, driven by a rise in heavy and civil engineering (3.9 percent). Retail trade rose 0.1 percent, driven by strength in food retailing. Also, professional, scientific and technical services rose 0.7 percent, marking the seventh straight quarter of growth. Meantime, financial and insurance services was flat. On the other hand agriculture, forestry and fishing fell 4.1 percent, the second consecutive quarterly fall for the industry. Also, information, media  and telecommunications declined by 1.3 percent, the largest fall since the March quarter 2010, driven by other information and media services (-1.7 percent), with flat to falling results across all subdivisions. Rental, hiring and real estate dropped by 1.6 percent, due to a fall in property operators and real estate services.

Through the year to the third quarter, the economy grew by 2.8 percent, much faster than a 1.9 percent expansion in the prior quarter while market estimated a 3.0 percent expansion. It was the strongest yearly figure since the June quarter 2016.





Tuesday December 05 2017
Australia Leaves Monetary Policy Unchanged
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia held the cash rate unchanged at a record low of 1.5 percent at its December 2017 meeting, as widely expected. While saying the Australian economy grew at around its trend rate over the year to the September quarter and is expected to average around 3 percent over the next few years, policymakers judged the outlook for household consumption is a continuing source of uncertainty.

Excerpt from the statement by the governor, Philip Lowe: 

Recent data suggest that in Australia business conditions are positive and capacity utilisation has increased. The outlook for non-mining business investment has improved further, with the forward-looking indicators being more positive than they have been for some time. Increased public infrastructure investment is also supporting the economy. One continuing source of uncertainty is the outlook for household consumption. Household incomes are growing slowly and debt levels are high.

Employment growth has been strong over 2017 and the unemployment rate has declined. Employment has been rising in all states and has been accompanied by a rise in labour force participation. The various forward-looking indicators continue to point to solid growth in employment over the period ahead. There are reports that some employers are finding it more difficult to hire workers with the necessary skills. However, wage growth remains low. This is likely to continue for a while yet, although the stronger conditions in the labour market should see some lift in wage growth over time.

Inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. The Bank's central forecast remains for inflation to pick up gradually as the economy strengthens.

The Australian dollar remains within the range that it has been in over the past two years. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.

Growth in housing debt has been outpacing the slow growth in household income for some time. To address the medium-term risks associated with high and rising household indebtedness, APRA has introduced a number of supervisory measures. Credit standards have been tightened in a way that has reduced the risk profile of borrowers. Nationwide measures of housing prices are little changed over the past six months, with conditions having eased in Sydney. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities.

The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.




Thursday November 16 2017
Australia Jobless Rate Falls to 56-Month Low of 5.4%
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly fell to 5.4 percent in October of 2017 from 5.5 percent in the previous month while market expected 5.5 percent. It was the lowest jobless rate since February 2013, as the economy added 3,700 jobs while the number of unemployed declined by 8,100.

In October, the number of unemployed decreased by 8,100 to 701,500. The number of unemployed persons looking for full-time work remained steady at 485,900 and the number of unemployed persons only looking for part-time work fell by 8,100 to 215,600.

Employment increased by 3,700 to 12,297,100, the smallest rise since January and way below estimates of a 17,500 increase: Full-time employment rose by 24,300 to 8,425,400 while part-time employment decreased by 20,700 to 3,871,700.

The labour force participation rate edged down to 65.1 percent from 65.2 percent in the preceding two months and slightly below expectations of 65.2 percent. 

Seasonally adjusted aggregate monthly hours worked in all jobs increased 4.6 million hours (0.3 percent) to 1,723.7 million hours. Meantime, the seasonally adjusted employment to population ratio fell slightly to 61.6 from 61.7 in September.


Tuesday November 07 2017
Australia Holds Cash Rate Steady at 1.5% in November
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 at its November 2017 meeting, as widely expected. Policymakers said the Australian economy is expected to advance at an annual rate of around 3 percent over the next couple of years supported by improving outlook of non-mining investment while inflation is estimated to pick up gradually as the economy strengthens.

Excerpt from the statement by the governor, Philip Lowe: 

The Bank's forecasts for growth in the Australian economy are largely unchanged. The central forecast is for GDP growth to pick up and to average around 3 per cent over the next few years. Business conditions are positive and capacity utilisation has increased. The outlook for non-mining business investment has improved, with the forward-looking indicators being more positive than they have been for some time. Increased public infrastructure investment is also supporting the economy. One continuing source of uncertainty is the outlook for household consumption. Household incomes are growing slowly and debt levels are high.

The labour market has continued to strengthen. Employment has been rising in all states and has been accompanied by a rise in labour force participation. The various forward-looking indicators continue to point to solid growth in employment over the period ahead. The unemployment rate is expected to decline gradually from its current level of 5½ per cent. Wage growth remains low. This is likely to continue for a while yet, although the stronger conditions in the labour market should see some lift in wage growth over time.

Inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. In underlying terms, inflation is likely to remain low for some time, reflecting the slow growth in labour costs and increased competitive pressures, especially in retailing. CPI inflation is being boosted by higher prices for tobacco and electricity. The Bank's central forecast remains for inflation to pick up gradually as the economy strengthens.

The Australian dollar has appreciated since mid year, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to continued subdued price pressures in the economy. It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.

Growth in housing debt has been outpacing the slow growth in household income for some time. To address the medium-term risks associated with high and rising household indebtedness, APRA has introduced a number of supervisory measures. Credit standards have been tightened in a way that has reduced the risk profile of borrowers. Housing market conditions have eased further in Sydney. In most cities, housing prices have shown little change over recent months, although they are still increasing in Melbourne. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities.

The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.


Thursday November 02 2017
Australia Trade Surplus Largest in 4 Months
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade surplus doubled to AUD 1.75 billion in September of 2017 from a downwardly revised AUD 0.87 billion in the prior month and beating market expectations of AUD 1.2 billion. It was the largest trade surplus since May, as exports increased by 3 percent to AUD 32.96 billion while imports was flat at AUD 31.21 billion.

Compared to the preceding month, exports of goods and services increased by 3 percent to AUD 32.96 billion in September.

Sales of non-rural goods (bulk commodities and non-bulk commodities) rose 3 percent to AUD 19.81 billion, mainly due to metal ores and minerals (8 percent) and other non-rural, including sugar and beverages (9 percent). Partly offsetting this rise was other minerals fuels (-1 percent) and machinery (-3 percent). 

Sales of non-monetary gold (gold which is not owned by monetary authorities and can be in the form of bullion, including coins, ingots or bar with a purity at least 995 parts per thousand) jumped by 17 percent to AUD 1.5 billion. 

Exports of rural goods rose AUD 5 million to AUD 4.14 billion, mainly due to other rural (2 percent).

Net exports of goods under merchanting increased by 2 percent to AUD 48 million.

Exports of services rose 1 percent  to AUD 7.47 billion, mainly due to travel (2 percent).

Imports of goods and services was flat at AUD 31.21 billion.

Purchases of consumption goods increased by 2.0 percent to AUD 8.15 billion. The main components contributing to the rise was non-industrial transport equipment (10 percent). 

Purchases of capital goods went up by 1 percent to AUD 6.22 billion, mainly driven by industrial transport equipment n.e.s (6 percent); civil aircraft and  confidentialised items (12 percent); machinery and industrial equipment (2 percent) Partly offsetting these falls was ADP equipment (-7 percent).

Imports of intermediate and other merchandise goods fell AUD 35 million to AUD 9.2 billion. Meanwhile, imports of non-monetary gold fell by 14 percent to AUD 385 million.

Imports of services declined by 1 percent to  AUD 7.26 billion. The main component contributing to the rise were maintenance and repair services n.i.e.(-50 percent); travel (1 percent) and transport (2 percent). 

Considering January to September 2017, trade surplus came in at AUD 13.40 billion, compared to a AUD 20.14 billion deficit in the same period the preceding year.



Wednesday October 25 2017
Australia Inflation Rate Below Expectations in Q3
ABS l Rida Husna | rida@tradingeconomics.com

Consumer prices in Australia rose 1.8 percent through the year to the September quarter of 2017, following a 1.9 percent in the second quarter and missing market consensus of a 2.0 percent rise. It was the lowest inflation rate since the December quarter 2016, mainly due to a drop in prices of food while cost of housing and transport continued to increase.

Year-on-year, cost increased at a slower pace for: education (3.1 percent from 3.3 percent in Q2) and insurance and financial services (1.8 percent from 2.1 percent). Meantime, cost rose more than in the preceding quarter for: alcohol and tobacco (7.0 percent from 5.9 percent); housing (3.3 percent from 2.4 percent); health (3.9 percent from 3.8 percent) and transport (2.7 percent from 2.1 percent), while rebounded for recreation and culture (0.6 percent from -0.1 percent).

On the other hand, cost fell for: food and non-alcoholic beverages (-0.7 percent from 1.9 percent); clothing and footwear (-3.2 percent from -1.9 percent); furnishing, household equipment and services (-0.8 percent following a flat reading in Q2) and communication (-2.9 percent from -3.8 percent). 

RBA Trimmed Mean CPI rose 1.8 percent year-on-year in the third quarter, the same as in the prior quarter but below expectations of a 2.0 percent gain. Quarter-on-quarter, the index increased by 0.4 percent, after a 0.5 percent rise in the June quarter while market estimated a 0.5 percent increase. RBA Weighted Mean CPI rose 1.9 percent year-on-year in the three months to September, compared to a 1.8 percent growth in Q2 and slightly below expectations of a 2.0 percent rise.

On a quarterly basis, consumer prices rose 0.6 percent, much faster than a 0.2 percent in the second quarter but below expectations of a 0.8 percent increase. The most significant price rises this quarter are electricity (8.9 percent), tobacco (4.1 percent), international holiday travel and accommodation (4.1 percent) and new dwelling purchase by owner-occupiers (0.8 percent). The most significant offsetting price falls were vegetables (-10.9 percent), automotive fuel (-2.3 percent) and telecommunication equipment and services (-1.5 percent).