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).




Thursday October 19 2017
Australia Jobless Rate Falls to 4-Month Low of 5.5%
Australian Bureau of Statistics l Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly fell to 5.5 percent in September of 2017 from 5.6 percent in the previous month and below market expectations of 5.6 percent. It was the lowest jobless rate since May.

In September, the number of unemployed decreased by 11,800 to 711,500. The number of unemployed persons looking for full-time work declined by 10,600 to 487,100 and the number of unemployed persons only looking for part-time work fell by 1,200 to 224,400.

Meanwhile, employment went up by 19,800 to 12,290,200, the smallest rise since February, but beating estimates of a 15,000 increase: Full-time employment rose by 6,100 to 8,398,200 while part-time employment increased by 13,700 to 3,892,000.

The labour force participation rate stood at 65.2 percent, unchanged from the preceding month. The figure remained the highest since January 2016 and in line with market  expections.
 
Seasonally adjusted aggregate monthly hours worked in all jobs increased 11.2 million hours (0.7 percent) to 1,718.2 million hours. Meantime, the seasonally adjusted employment to population ratio remained steady at 61.6 percent.


Thursday October 05 2017
Australia Trade Surplus Larger than Expected in August
Australian Bureau of Statistics l Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's trade surplus widened 22.4 percent to AUD 0.99 billion in August of 2017 from an upwardly revised AUD 0.81 billion in July and above market expectations of AUD 0.88 billion.

Exports of goods and services rose 1 percent to AUD 32.23 billion in August from AUD 32.06 billion in July. Sales of non-rural goods (bulk commodities and non-bulk commodities) rose 2 percent to AUD 19.37 billion, mainly due to metal ores and minerals (10 percent), machinery (5 percent) and goods procured in ports by carriers (5 percent). Partly offsetting this rise was metals, excluding non-monetary gold (-12 percent) and coal, coke and briquettes (-3 percent). Exports of non-monetary 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, dropped by 19 percent to AUD 1.28 billion. Meantime, net exports of goods under merchanting were unchanged at  AUD 47 million. Exports of rural goods went down 1 percent to AUD 4.16 billion, driven by wool and sheepskins (-4 percent) and other rural (-1 percent).

Exports of services rose 1 percent  to AUD 7.36 billion, mainly due to travel (2 percent).
 
Imports of goods and services were almost unchanged from the previous month at AUD 31.24 billion. Purchases of consumption goods decreased by 4 percent to AUD 7.96 billion. The main components contributing to the fall were: food and beverages mainly for consumption (-8 percent); non-industrial transport equipment (-6 percent); household electrical items (-4 percent); consumption goods n.e.s (-2 percent); textiles, clothing; footwear (-1 percent), and toys, books and leisure goods (-1 percent). Purchases of capital goods declined 3 percent to AUD 6.12 billion, mainly due to a falls in imports of civil aircraft and confidentialised items (-9 percent); telecomunicatins equipment (-7 percent); ADP equipment (-4 percent); industrial transport equipment (-4 percent), and capital goods n.e.s (-6 percent). Partly offsetting these falls was machinery and industrial equipment (6 percent). Meanwhile, imports of intermediate and other merchandise goods increased 4 percent to AUD 9.37 billion. The main components contributing to the rise were fuels and lubricants (11 percent); primary industrial supplies n.e.s (10 percent); processed industrial supplies n.e.s (3 percent); food and beverages, mainly for industry (3 percent); and other parts for capital goods (3 percent). Partly offsetting this increase were parts for ADP equipment (-2 percent); and organic and inorganic chemicals (-19 percent). Imports of non-monetary gold fell by 2 percent to AUD 450 million.
 
Imports of services rose 1 percent to AUD 7.35 billion. The main components contributing to the increase were maintenance and repair services n.i.e.(41 percent) and travel (1 percent).
 
Considering January to August 2017, the trade balance posted a AUD 12.27 billion surplus, compared with a AUD 19.66 billion deficit in the same period of 2016.


Tuesday October 03 2017
Australia Leaves Monetary Policy Unchanged
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia held the cash rate steady at a record low of 1.5 percent at its October 2017 meeting, as widely expected. Policymakers said a pick-up in non-mining business investment over recent months would be a welcome development while low level of interest rates continue to support the economy.

Excerpt from the statement by the governor, Philip Lowe:

The Australian economy expanded by 0.8 per cent in the June quarter. This outcome and other recent data are consistent with the Bank's expectation that growth in the Australian economy will gradually pick up over the coming year.

Over recent months there have been more consistent signs that non-mining business investment is picking up. A consolidation of this trend would be a welcome development. Business conditions as reported in surveys are at a high level and capacity utilisation has risen. A large pipeline of infrastructure investment is also supporting the outlook. Against this, slow growth in real wages and high levels of household debt are likely to constrain growth in household spending.

Employment has continued to grow strongly over recent months. Employment has increased in all states and has been accompanied by a rise in labour force participation. The various forward-looking indicators point to solid growth in employment over the period ahead, although the unemployment rate is expected to decline only gradually over the next couple of years.

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 also remains low and is expected 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 incomes for some time. To address the medium-term risks associated with high and rising household indebtedness, APRA has introduced a number of supervisory measures. Following some tightening in credit conditions, growth in borrowing by investors has slowed a little recently. In the housing market, conditions continue to vary considerably around the country. Housing prices have been rising briskly in some markets, while in others they have been declining. In Sydney, where prices have increased significantly, there have been further signs that conditions are easing. 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 September 14 2017
Australia Jobless Rate Steady at 5.6% in August
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate stood at 5.6 percent in August of 2017, the same as in a month earlier and matching market estimates. The economy added 54,200 jobs while the number of unemployed decreased by 1,100.

In August,  the seasonally adjusted labour force participation rate increased to 65.3 percent from 65.1 percent in the previous period, the highest since September 2012 and above expections of 65.1 percent.

Employment rose by 54,200 to 12,269,000, the biggest jump since October 2015 and beating estimates of a 15,000 increase: full-time employment went up by 40,100 to 8,392,300 while part-time employment increased by 14,100 to 3,876,700.

Unemployment decreased by 1,100 to 727,500. The number of unemployed persons looking for full-time work increased by 6,400 to 501,600 and the number of unemployed persons only looking for part-time work fell by 7,500 to 225,900.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 6.1 million hours (0.4 percent) to 1,705.4 million hours. Meantime, the seasonally adjusted employment to population ratio increased to 61.6 percent from 61.4 percent in July.


Thursday September 07 2017
Australia Trade Surplus Smallest in 3 Months
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade surplus unexpectedly narrowed 48 percent to AUD 0.46 billion in July of 2017 from an upwardly revised AUD 0.89 billion in June while market estimated AUD 0.88 billion. It was the smallest trade surplus in three months, as exports fell 2 percent from a month earlier to AUD 31.07 billion and imports declined by 1 percent to AUD 30.61 billion.

Compared to the prior month, sales of goods and services declined by 2 percent to AUD 31.07 billion in July.

Exports of non-rural goods (bulk commodities and non-bulk commodities) fell 3 percent to AUD 18.9 billion, mainly due to other mineral fuels (-12 percent); metal ores and minerals (-2.0 percent) and coal, coke and briquettes (-2.0 percent). 

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) dropped by  17 percent to AUD 1.59 billion. Meantime, net exports of goods under merchanting fell by 15 percent to AUD 22 million.

Exports of rural goods rose 2 percent to AUD 4.26 billion, driven by other rural (6 percent) and wool and sheepskins (26 percent). Partly offsetting this rise were cereal grains and cereal preparations (-13.0 percent).

Exports of services went up 3 percent  to AUD 6.31 billion mainly due to travel (3 percent).

Imports of goods and services declined by 1 percent to AUD 30.61 billion.

Purchases of consumption goods decreased by 2.0 percent to AUD 8.38 billion. The main components contributing to the fall were: consumption goods n.e.s (-2 percent); textile, clothing, footwear (-3 percent) and toys, books and leisure goods (-5. percent).

Purchases of capital goods went down 2 percent to AUD 6.34 billion, mainly driven by civil aircraft and confidentialised items (-41 percent) and machinery and industrial equipment (-5 percent). Partly offsetting these falls was capital goods n.e.s (23 percent).

Imports of intermediate and other merchandise goods fell 1 percent to AUD 9.0 billion. The main component contributing to the fall was processed industrial supplies n.e.s (-3 percent); parts for transport equipment (-6 percent), other parts for capital goods (-3 percent) and other merchandise goods (-62 percent). Partly offsetting this fall were fuels and lubricants (6 percent).

Imports of non-monetary gold fell by 17 percent to AUD 459 million.

Imports of services rose 1 percent to  AUD 6.43 billion. The main component contributing to the rise were maintenance and repair services n.i.e.(48 percent) and travel (1 percent). 

Considering January to July 2017, trade surplus came in at AUD 10.69 billion.


Wednesday September 06 2017
Australia GDP Growth Accelerates to 0.8% in Q2
ABS l Rida Husna | rida@tradingeconomics.com

The Australian economy expanded 0.8 percent in the June quarter of 2017, much stronger than a 0.3 percent growth in the first quarter and matching market consensus. The solid expansion was mainly supported by strength in domestic demand and net exports.

In the three months to June, household consumption added 0.4 percentage points to growth, government spending contributed 0.2 percentage points to growth and exports added 0.6 percentage points to growth. On the other hand, non-residential construction subttracted 0.4 percentage points from growth and inventories detracted 0.6 percentage points from growth.

Final consumption expenditure rose 0.8 percent. Household spending increased by 0.7 percent, driven by rises in food (1.5 percent), insurance and other financial services (1.3 percent) and rent and other dwelling services (0.5 percent). Partially offsetting the rise was electricity, gas and other fuel (-3.7 percent) and purchases of vehicles (-1.1 percent). Meanwhile, government final consumption expenditure increased by 1.2 percent.

Gross fixed capital formation expanded by 1.5 percent. Public investment rose 11.9 percent, driven by state and local general government (25.5 percent). This included the acquisition of the recently completed Royal Adelaide Hospital from the private sector. Private investment declined by 1.1 percent, due to non-dwelling construction (-7.7 percent). Partially offsetting the fall was machinery and equipment (2.9 percent). Total gross fixed capital formation contributed 0.4 percentage points to GDP growth.

Exports of goods and services grew by 2.7 percent. Exports of goods increased by 3.1 percent, with non-rural exports up 3.5 percent and rural exports down 0.9 percent. Exports of services rose 2.4 percent. Imports of goods and services went up by 1.2 percent.  Imports of goods rose 1.4 percent, driven by a rise in capital goods (2.8 percent). Imports of services were up 0.5 percent. 

The changes in total inventories was a decrease of AUD 419 million in seasonally adjusted terms following a rise of AUD 1.982 million in the prior quarter. The fall was driven by  a rundown in wholesale trade inventories, the largest since June 2010, as grain wholesalers run down stock following the strong grain harvest this year. Offsetting the decrease was an increase in manufacturing inventories.

By industry, most sectors showed an increase. Agriculture, forestry and fishing rose 0.4 percent, driven by a rise in livestock. Mining rose 0.6 percent, driven by oil and gas extraction (8.2 percent). Manufacturing went up 1.8 percent, supported by rises in seven of the eight manufacturing sub-categories. This was the largest rise in manufacturing since Q2 2011. At the same time, construction rose 1.4 percent, driven by rises across the industry. Retail trade rose 1.6 percent, the largest increase since Q2 2012, driven by rises in other store based retailing and food retailing. Also, accommodation and food services grew by 2.1 percent, the fastest since Q2 2014, driven by food and beverage services. Also, professional, scientific and technical services rose 2.5 percent, marking the sixth straight month of growth. On the other hand, electricity, gas , water and waste services fell 1.4 percent, mainly due to a fall in electricity supply (2.8 percent, which was the sharpest drop since Q1 2003). Also, wholesale trade decreased 1.9 percent, driven by falls in basic material wholesaling, machinery and equipment wholesaling and other goods wholesaling. Transport, postal and warehousing contracted 1.5 percent, mainly due to road transport (-0.8 percent) and rail transport.

Through the year to the second quarter, the economy grew by 1.8 percent, following a 1.7 percent expansion in the prior quarter and in line with estimates.