Thursday April 19 2018
Australia Jobless Rate Steady at 5.5% in March
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate stood at 5.5 percent in March of 2018, the same as a downwardly revised figure in the prior month and in line with market consensus. The economy added 4,900 jobs while the number of unemployed fell by 2,400.

In March, the number of unemployed declined by 2,400  to 730,200, as those looking for full-time work increased by 9,300 to 522,400, while those looking for only part-time work dropped by 11,700 to 207,800.

Employment increased by 4,900 to 12,484,100, way below estimates of an increase of 21,000. Full-time employment decreased by 19,900 to 8,514,100, while part-time employment went up 24,800 to 3.970,000. 

The labour force participation rate inched down to 65.5 percent from 65.6 percent in a month earlier and less than expectations of 65.7 percent. 

Seasonally adjusted monthly hours worked in all jobs increased by 4.5 million hours (0.26 percent) to 1,740.4 million hours. Meantime, the seasonally adjusted employment to population ratio edged down to 61.9 from 62.0 percent in February.




Thursday April 05 2018
Australia Trade Surplus Beats Estimates
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade surplus narrowed by 13 percent to AUD 0.83 billion in February of 2018 from a downwardly revised AUD 0.95 billion in the prior month but above market expectations of a AUD 0.7 billion surplus.

In February, exports were flat on the month at AUD 34.23 billion. Sales of rural goods rose by 17 percent to AUD 3.88 billion, mainly due to other rural (34 percent) and wool and sheepskins (25 percent). Also, exports of services went up by 1 percent to AUD 7.22 billion, due to travel sales (1 percent) and other services (1 percent). On the other hand, sales of non-rural goods fell AUD 90 million to AUD 21.42 billion, mainly due to trasport equipment (-36 percent) and other manunufactures (-7 percent). In addition, sales of non-monetary gold fell by 23 percent to AUD 1.69 billion. Meantime, net exports of goods under merchanting remained steady at AUD 7 million. 

Imports were unchanged at AUD 33.41 billion. Purchases of consumption goods increased by 7 percent to AUD 8.95 billion, driven by non-industrial transport equipment (20 percent); textiles, clothing and footwear (6 percent) and food and beverages, mainly for consumption (4 percent). Also, imports of capital goods grew by 1 percent to AUD 6.21 billion, supported by machinery and industrial equipment (15 percent) and industrial transport equipment n.e.s (12 percent). In addition, purchases of non-monetary gold rose by 17 percent to AUD 480 million. Imports of services went up by 1 percent to AUD 7.81 billion, mainly due to travel purchases (1 percent) and transport (2 percent). On the other hand, imports of intermediate and other merchandise goods fell by 6 percent to AUD 9.96 billion, driven by fuels and lubricants (-19 percent). 

Considering January to February 2018, the trade surplus came in at AUD 1.78 billion, down sharply from AUD 4.74 billion surplus in the same period the prior year.




Tuesday April 03 2018
Australia Holds Cash Rate Steady at 1.5% in April
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 April 2018 meeting, as widely expected. While saying the economy is projected to grow faster in 2018 supported by positive business conditions and stronger exports, policymakers viewed household consumption remains a continuing source of uncertainty.

Excerpt from the statement by the governor, Philip Lowe: 

The global economy has strengthened over the past year. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. The Chinese economy continues to grow solidly, with the authorities paying increased attention to the risks in the financial sector and the sustainability of growth. Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. As conditions have improved in the global economy, a number of central banks have withdrawn some monetary stimulus and further steps in this direction are expected.
 
The Australian economy grew by 2.4 per cent over 2017. The Bank's central forecast remains for faster growth in 2018. Business conditions are positive and non-mining business investment is increasing. Higher levels of public infrastructure investment are also supporting the economy. Stronger growth in exports is expected after temporary weakness at the end of 2017. One continuing source of uncertainty is the outlook for household consumption, although consumption growth picked up in late 2017. Household income has been growing slowly and debt levels are high.
 
Employment has grown strongly over the past year, with employment rising in all states. The strong growth in employment has been accompanied by a significant rise in labour force participation, particularly by women and older Australians. The unemployment rate has declined over the past year, but has been steady at around 5½ per cent over the past six months. The various forward-looking indicators continue to point to solid growth in employment in the period ahead, with a further gradual reduction in the unemployment rate expected. Notwithstanding the improving labour market, wages growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wages growth over time. Consistent with this, the rate of wages growth appears to have troughed and there are reports that some employers are finding it more difficult to hire workers with the necessary skills.
 
Inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. Inflation is likely to remain low for some time, reflecting low growth in labour costs and strong competition in retailing. A gradual pick-up in inflation is, however, expected as the economy strengthens. The central forecast is for CPI inflation to be a bit above 2 per cent in 2018.

The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. 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 March 22 2018
Australia Jobless Rate Edges Up to 5.6% in February
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate rose slightly to 5.6 percent in February of 2018 from 5.5 percent in the preceding month and above market consensus of 5.5 percent. The economy added 17,500 jobs while the number of unemployed increased by 8,900.

In February, the number of unemployed went up by 8,900  to 734,100, as those looking for full-time work increased by 13,600 to 512,900 and those looking for only part-time work fell by 4,700 to 221,200.

Employment increased by 17,500 to 12,480,500, below estimates of an increase of 20,000. It marked the 17th straight month of gains in employment, the longest such streak since the monthly series began in 1978. Full-time employment surged by 64,900 to 8,533,600 while part-time employment declined by 47,400 to 3.946,900. 

The labour force participation rate inched up to 65.7 percent from 65.6 percent in a month earlier and slightly above expectations of 65.6 percent. It was the highest level since early 2011.

Seasonally adjusted monthly hours worked in all jobs increased by 21.2 million hours (1.2 percent) to 1,734.1 million hours. Meantime, the seasonally adjusted employment to population ratio remained steady at 62.0 percent.


Thursday March 08 2018
Australia Trade Balance Swings to Surplus in January
Australian Bureau of Statistics | Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia posted a trade surplus of AUD 1.06 billion in January 2018, reversing from a downwardly revised AUD 1.11 billion gap in a month earlier and way above market estimates of a AUD 0.3 billion surplus. It was the largest trade surplus since September 2017, as exports jumped 4 percent from a month earlier to AUD 33.92 billion while imports declined by 2 percent to AUD 32.87 billion.

In January, exports rose 4 percent month-on-month to AUD 33.92 billion. Sales of non-rural goods grew 4 percent to AUD 21.03 billion, mainly metal ores and minerals (1 percent), other mineral fuels (9 percent) while those of coal, coke and briquetted were almost similar from a month earlier. Also, exports of non-monetary gold surged (54 percent to AUD 2.20 billion) while services increased 1 percent  to AUD 7.24 billion, due to higher travel sales (1 percent). In contrast, exports fell for: rural goods (-8 percent to AUD 3.42 billion), mainly other rural (-13 percent); and net exports of goods under merchanting (-17 percent to AUD 43 million).

Meantime, imports fell 2 percent to  AUD 32.87 billion. Purchases dropped for: intermediate and other merchandise goods (-1 percent to AUD 10.64 billion), mainly fuels and lubricants (-1 percent), parts for transport equipment (-7 percent) and other parts for capital goods  (-1 percent), food and beverages mainly for industry (-13 percent), organic and inorganic chemicals (-10 percent), iron and steel (-7 percent). Also, imports declined for consumption goods (-7 percent to AUD 8.37 billion), mainly textiles, clothing and footwear (-14 percent), non industrial transports equipment (-7 percent), and consumption goods n.e.s. (-5 percent); and capital goods (-1 percent to AUD 5.96 billion), mainly machinery and industrial equipment (-4 percent) and telecommunications equipment (-20 percent). In addition, imports of non-monetary gold tumbled by 19 percent to AUD 410 million, while those of services were almost similar from a month earlier at AUD 7.49 billion.
 


Wednesday March 07 2018
Australia Q4 GDP Growth Below Estimates
ABS l Rida Husna | rida@tradingeconomics.com

The Australian economy advanced 0.4 percent in the December quarter of 2017, less than market consensus of a 0.6 percent expansion and after an upwardly revised 0.7 percent growth in the previous quarter. It was the weakest growth rate since a contraction in the September quarter 2016, as positive contributions mainly came from final consumption expenditure while non-dwelling construction and net trade had a downward effect.

In the three months to December, the positive contributions were made by household consumption (0.6 percentage points), government spending (0.3 pp), public investment (0.2 pp) and private investment in machinery and equipment (0.1pp). Meantime, the growth was lowered by: investment in non-dwelling construction (-0.5 pp), investment in dwellings (-0.1 pp) and net trade (-0.5 pp). 

Final consumption expenditure rose 1.1 percent. Household spending increased by 1 percent, driven by rises in health (3.4 percent); hotels, cafes and restaurants (2.9 percent) and recreation and culture (2.0 percent). Offsetting the rise was drop in electricity, gas and other fuels (-3.1 percent) and food (-0.7 percent). Government spending rose by 1.7 percent with state and local government growing by 0.7 percent and national government by 3.1 percent.

Gross fixed capital formation contracted by 1.2 percent as private investment was down 2.2 percent, due to non-dwelling construction (-8.0 percent) and to a lesser extent dwellings (-1.3 percent). In contrast, public investment increased by 2.9 percent, driven by state and local general government (1.9 percent) as assets were transfered from the private sector. Also, investment in machinery and equipment rose 3.3 percent.

Total inventories increased AUD 14 million following a fall of AUD 93 million in the prior quarter. The increase was driven by a build up in mining inventories, the second quarterly increase in the last six quarters. Offsetting the increase was a decrease in farm and retail trade inventories.

Exports of goods and services fell by 1.8 percent. Exports of goods dropped by 1.7 percent, with rural exports down 9.7 percent and non-rural exports down 0.3 percent. Exports of services also fell by 1.9 percent. Imports of goods and services went up by 0.5 percent. Imports of goods rose 1.6 percent, driven by a rise in consumption goods (4.7 percent) and intermediate goods (4.4 percent). Imports of services were down 2.7 percent. 

By industry, mining rose 1.3 percent, driven by iron ore mining (5.5 percent) and coal mining (0.7 percent) while oil and gas extraction was down (-1.8 percent). Construction expanded by 0.3 percent, due to a rise in building construction (0.9 percent). Also, information, media and telecommunications increased by 2.9 percent, driven by telecommunications services (3.5 percent) and other information and media services (2.2 percent). Financial and insurance services grew by 0.1 percent, the least since Q2 2014, as finance reported no growth and financial and insurance services were up 0.2 percent. At the same time, healthcare and social assistance advanced 1.9 percent, driven by rises in both private and public health. On the other hand, agriculture, forestry and fishing fell by 2.7 percent, the third consecutive quarterly fall. Also, manufacturing declined by 1 percent, with mixed results across the five sub-categories. Electricity, gas, water and waste services decreased by 0.8 percent, due to a fall in water supply and waste services (-1.5 percent), electricity supply (-0.2 percent) and gas supply (-1.1 percent).

Through the year to the fourth quarter, the economy grew by 2.4 percent, slower than an upwardly revised 2.9 percent expansion in the prior quarter and slightly below expectations of a 2.5 percent growth. 





Tuesday March 06 2018
Australia Holds Cash Rate Steady at 1.5% in March
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 March 2018 meeting, as expected, saying the economy is estimated to grow faster in 2018 than it did in 2017 and household consumption is a continuing source of uncertainty.

Excerpt from the statement by the governor, Philip Lowe: 

Globally, inflation remains low, although higher commodity prices and tight labour markets are likely to see inflation increase over the next couple of years. Long-term bond yields have risen but are still low. Market volatility has increased from the very low levels of last year. As conditions have improved in the global economy, a number of central banks have withdrawn some monetary stimulus. Financial conditions remain expansionary, with credit spreads narrow.

The Bank's central forecast is for the Australian economy to grow faster in 2018 than it did in 2017. Business conditions are positive and non-mining business investment is increasing. Higher levels of public infrastructure investment are also supporting the economy. Further growth in exports is expected after temporary weakness at the end of 2017. One continuing source of uncertainty is the outlook for household consumption. Household incomes are growing slowly and debt levels are high.

Employment grew strongly over the past year and the unemployment rate declined. Employment has been rising in all states and has been accompanied by a significant rise in labour force participation. The various forward-looking indicators continue to point to solid growth in employment over the period ahead, with a further gradual reduction in the unemployment rate expected. Notwithstanding the improving labour market, wage growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wage growth over time. Consistent with this, the rate of wage growth appears to have troughed and there are reports that some employers are finding it more difficult to hire workers with the necessary skills.

Inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. Inflation is likely to remain low for some time, reflecting low growth in labour costs and strong competition in retailing. A gradual pick-up in inflation is, however, expected as the economy strengthens. The central forecast is for CPI inflation to be a bit above 2 per cent in 2018.

On a trade-weighted basis, 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.

The housing markets in Sydney and Melbourne have slowed. Nationwide measures of housing prices are little changed over the past six months, with prices having recorded falls in some areas. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. APRA's supervisory measures and tighter credit standards have been helpful in containing the build-up of risk in household balance sheets, although the level of household debt remains high.

The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. 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 February 15 2018
Australia Jobless Rate Edges Down to 5.5% in January
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate fell slightly to 5.5 percent in January of 2018 from an upwardly revised 5.6 percent in the preceding month and in line with market consensus. The economy added 16,000 jobs while the number of unemployed declined by 7,900.

In January, the number of unemployed dropped by 7,900  to 723,800, as those looking for full-time work fell by 4,500 to 497,800 and those looking for only part-time work went down by 3,400 to 22,6000

Employment increased by 16,000 to 12,453,500, above estimates of an increase of 15.000. It was the 16th straight month of gains in employment, the longest such streak since the monthly series began in 1978. Full-time employment decreased by 49,800 to 8,460,900 and part-time employment grew by 65,900 to 3.992,600. 

The labour force participation rate edged down to 65.6 percent from 65.7 percent in a month earlier and matching expectations.

Seasonally adjusted monthly hours worked in all jobs dropped by 24.1 million hours (1.4 percent) to 1,708.2 million hours. Meantime, the seasonally adjusted employment to population ratio remained steady at 62.0 percent.


Tuesday February 06 2018
Australia Keeps Cash Rate Steady in February
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 February 2018 meeting, as widely expected. Policymakers said the Australian economy is expected to advance at a bit above 3 percent over the next couple of years supported by positive business conditions and improving outlook of non-mining investment while inflation is likely to remain low for some time.

Excerpt from the statement by the governor, Philip Lowe: 

There was a broad-based pick-up in the global economy in 2017. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. Growth has also picked up in the Asian economies, partly supported by increased international trade. The Chinese economy continues to grow solidly, with the authorities paying increased attention to the risks in the financial sector and the sustainability of growth.

The Bank's central forecast for the Australian economy is for GDP growth to pick up, to average a bit above 3 percen over the next couple of years. The data over the summer have been consistent with this outlook. Business conditions are positive and the outlook for non-mining business investment has improved. 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 grew strongly over 2017 and the unemployment rate declined. Employment has been rising in all states and has been accompanied by a significant rise in labour force participation. The various forward-looking indicators continue to point to solid growth in employment over the period ahead, with a further gradual reduction in the unemployment rate expected. Notwithstanding the improving labour market, wage growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wage growth over time. There are reports that some employers are finding it more difficult to hire workers with the necessary skills.

Inflation is low, with both CPI and underlying inflation running a little below 2 per cent. Inflation is likely to remain low for some time, reflecting low growth in labour costs and strong competition in retailing. A gradual pick-up in inflation is, however, expected as the economy strengthens. The central forecast is for CPI inflation to be a bit above 2 per cent in 2018.

On a trade-weighted basis, 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.

Nationwide measures of housing prices are little changed over the past six months, with prices having recorded falls in some areas. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. To address the medium-term risks associated with high and rising household indebtedness, APRA introduced a number of supervisory measures. Tighter credit standards have also been helpful in containing the build-up of risk in household balance sheets.

The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. 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.



Tuesday February 06 2018
Australia Posts Largest Trade Gap in 16 Months
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade balance posted a AUD 1.36 billion deficit in December 2017, compared with a AUD 4.41 billion surplus a year earlier and missing market expectations of a AUD 0.2 billion surplus. It was the biggest trade gap since August 2016, mainly due to a jump in imports.

In December, imports soared 6 percent from the previous month to an all-time high of AUD 33.82 billion, as purchases rose for: intermediate and other merchandise goods (9 percent to AUD 10.69 billion), mainly fuels and lubricants (21 percent), parts for transport equipment (11 percent) and processed industrial supplies (2 percent); consumption goods (5 percent to AUD 8.98 billion), mainly textiles, clothing and footwear (8 percent) and consumption goods n.e.s. (7 percent); and capital goods (6 percent to AUD 6.17 billion), mainly machinery and industrial equipment (11 percent) and telecommunications equipment (13 percent). In addition, imports of non-monetary gold jumped by 68 percent to AUD 505 million, while those of services were almost similar from a month earlier at AUD 7.49 billion.
Meanwhile, exports rose at a slower 2 percent to AUD 32.47 billion. Sales of non-rural goods grew 4 percent to AUD 20.06 billion, mainly metal ores and minerals (5 percent), coal, coke and briquettes (7 percent) and other mineral fuels (9 percent). By contrast, exports fell for: rural goods (-4 percent to AUD 3.78 billion), mainly other rural (-13 percent); non-monetary gold (-1 percent to AUD 1.43 billion); and net exports of goods under merchanting (-2 percent to AUD 52 million). Also, exports of services declined 1 percent  to AUD 7.15 billion, due to lower travel sales (-1 percent).

Considering full 2017, the trade balance posted a surplus of AUD 11.1 billion, compared with a AUD 13.7 billion deficit in 2016. Exports grew 15 percent to AUD 50.7 billion while imports was up 7 percent to AUD 26 billion.