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. 






Tuesday September 05 2017
Australia Holds Cash Rate Steady at 1.5% in September
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 September 5th, as widely expected. Policymakers said the Australian economy is expected to pick up gradually over the coming year, supported by improving outlook of non-mining investment, while inflation is estimated to rise as the economy strengthens.

Excerpt from the statement by the governor, Philip Lowe:

The recent data have been consistent with the Bank's expectation that growth in the Australian economy will gradually pick up over the coming year. The decline in mining investment will soon run its course. The outlook for non-mining investment has improved recently and reported business conditions are at a high level. Residential construction activity remains at a high level, but little further growth is expected. Retail sales have picked up recently, although slow growth in real wages and high levels of household debt are likely to constrain future growth in spending.

Employment growth has been stronger over recent months and has increased in all states. The various forward-looking indicators point to solid growth in employment over the period ahead. The unemployment rate is expected to decline a little over the next couple of years.

Wage growth remains low. This is likely to continue for a while yet, although stronger conditions in the labour market should see some lift in wages growth over time. Inflation also remains low and is expected to pick up gradually as the economy strengthens.

The Australian dollar has appreciated over recent months, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to the 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.

Conditions in the housing market continue to vary considerably around the country. Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney. In some 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. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following supervisory measures to address the risks associated with high and rising levels of household indebtedness. Growth in housing debt has been outpacing the slow growth in household incomes.

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 August 17 2017
Australia Jobless Rate Down Slightly to 5.6% in July
ABS l Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate fell to 5.6 percent in July of 2017 from an upwardly revised 5.7 percent in a month earlier and matching market estimates. The economy added 27,900 jobs while the number of unemployed increased by 1,100.

In July, the seasonally adjusted labour force participation rate increased to a 18-month high of 65.1 percent from 65.0 percent in the previous period, slightly above expections of 65.0 percent.

Employment increased by 27,900 to 12,201,400, beating estimates of a 20,000 increase: full-time employment decreased by 20,300 to 8,342,300 while part-time employment increased by 48,200 to 3,859,100.

Unemployment increased 1,100 to 730,600. The number of unemployed persons looking for full-time work fell by 3,800 to 496,400 and the number of unemployed persons only looking for part-time work rose 4,900 to 234,200.

Seasonally adjusted aggregate monthly hours worked in all jobs decreased 14.4 million hours (0.8 percent) to 1,690.4 million hours. Meantime, the seasonally adjusted employment to population ratio went up to 61.4 percent, the highest since April 2013.


Thursday August 03 2017
Australia Trade Surplus Narrows More Than Estimated
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade surplus narrowed 58 percent to AUD 0.86 billion in June of 2017 from a downwardly revised AUD 2.02 billion in May. The figure came in below market expectations of AUD 1.8 billion, as exports fell 1 percent from a month earlier to AUD 31.78 billion while imports rose 2 percent to a record high of AUD 30.92 billion.

Compared to the prior month, sales of goods and services declined by 1 percent to AUD 31.78 billion.

Exports of non-rural goods (bulk commodities and non-bulk commodities) fell 4 percent to AUD 19.57 billion, mainly due to a 7.0 percent drop in metal ores and minerals and a 0.6 percent decrease in coal, coke and briquettes. Partly offsetting these falls was a 14.0 percent rise in transport equipment.

Net exports of goods under merchanting decreased by 4 percent to AUD 26 million.

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) rose 27 percent to AUD 1.92 billion.

Exports of rural goods rose 1 percent to AUD 4.13 billion, driven by a 4.0 percent rise in meat and meat preparations. Partly offsetting this rise was a 8.0 percent decline in wool and sheepskins. 

Exports of services went down 2 percent  to AUD 6.14 billion mainly due to a 3.0 percent decline in travel.

Imports of goods and services rose 2 percent to AUD 30.92 billion, the largest on record.

Purchases of capital goods increased by 13 percent to AUD 6.30 billion. The main components contributing to the rise were telecommunications equipment (78 percent), civil aircraft and confidentialised items (up AUD 402 million) and industrial transport equipment n.e.s., (24 percent). 

Imports of non-monetary gold jumped 76 percent to AUD 551 million.

Purchases of consumption goods went up 2 percent to AUD 8.56 billion, mainly driven by consumption goods n.e.s (7 percent) and food and beverages, mainly for consumption (16 percent). In contrast, purchases of non-industrial transport equipment declined by 7 percent.

Imports of intermediate and other merchandise goods fell 4 percent to AUD 9.20 billion. The main component contributing to the fall in seasonally adjusted estimates was fuels and lubricants (-18 percent). Partly offsetting this fall was processed industrial supplies n.e.s., (2 percent).

Imports of services declined  AUD 30 million to AUD 6.39 billion. The main component contributing to the decline was maintenance and repair services n.i.e.(-36 percent) and travel (-1 percent). Partly offsetting these falls was other services, up AUD 9 million.

Considering January to June 2017, the trade surplus was registered at AUD 10.29 billion.


Tuesday August 01 2017
Australia Keeps Cash Rate Steady At 1.5% In August
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 August 1st, as widely expected. Policymakers said the Australian economy is expected to grow at an annual rate of around 3 percent over the next couple of years and 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 the Australian economy are largely unchanged. Over the next couple of years, the central forecast is for the economy to grow at an annual rate of around 3 percent. The transition to lower levels of mining investment following the mining investment boom is almost complete, with some large LNG projects now close to completion. Business conditions have improved and capacity utilisation has increased. Some pick-up in non-mining business investment is expected. The current high level of residential construction is forecast to be maintained for some time, before gradually easing. One source of uncertainty for the domestic economy is the outlook for consumption. Retail sales have picked up recently, but slow growth in real wages and high levels of household debt are likely to constrain growth in spending.

Employment growth has been stronger over recent months, and has increased in all states. The various forward-looking indicators point to continued growth in employment over the period ahead. The unemployment rate is expected to decline a little over the next couple of years. Against this, however, wage growth remains low and this is likely to continue for a while yet.

The recent inflation data were broadly as the Bank expected. Both CPI inflation and measures of underlying inflation are running at a little under 2 percent. Inflation is expected to pick up gradually as the economy strengthens. Higher prices for electricity and tobacco are expected to boost CPI inflation. A factor working in the other direction is increased competition from new entrants in the retail industry.

The Australian dollar has appreciated recently, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to 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.

Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In some 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. Rent increases remain low in most cities. Investors in residential property are facing higher interest rates. There has also been some tightening of credit conditions following recent supervisory measures to address the risks associated with high and rising levels of household indebtedness. Growth in housing debt has been outpacing the slow growth in household incomes.

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.


Wednesday July 26 2017
Australia Inflation Rate Edges Down To 1.9% In Q2
ABS | Charles | charles@tradingeconomics.com

Consumer prices in Australia rose 1.9 percent through the year to the June quarter of 2017 from 2.1 percent in the first quarter and below market consensus of a 2.2 percent rise. The inflation rate edged lower from the 2-1/2 year high in Q1, mainly due to a slowdown in cost of housing and transport.

Year-on-year, cost increased at a slower pace for: housing (2.4 percent from 2.5 percent in Q1), transport (2.1 percent from 3.8 percent) and insurance and financial services (2.1 percent from 2.7 percent). Cost went up more than in the prior quarter for food and non-alcoholic beverages (1.9 percent from 1.8 percent) while were steady for: alcohol and tobacco (5.9 percent), health (3.8 percent) and education (3.3 percent). In contrast, cost fell for: clothing and footwear (-1.9 percent from 0.3 percent); communication (-3.8 percent from -4.8 percent) and recreation and culture (-0.1 percent from -0.2 percent). Cost was flat for furnishing, household equipment and services (from -0.1 percent in the prior three months), 

RBA Trimmed Mean CPI rose 1.8 percent year-on-year in the second quarter 2017, after gaining 1.9 percent in the preceding quarter and consistent with the market consensus. Quarter-on-quarter, the index increased 0.5 percent, the same as in the March quarter and in line with market estimates. RBA Weighted Mean CPI rose 1.8 percent year-on-year in the three months to June 2017, up from a 1.7 percent growth in Q1 and slightly above expectations of a 1.7 percent rise.

On a quarterly basis, consumer prices rose 0.2 percent, below 0.5 percent in Q1 and short of market expectations of a 0.4 percent increase. It was the lowest figure since the March quarter 2016. The most significant price rises this quarter are medical and hospital services (4.1 percent), tobacco (1 percent), beer (1 percent) and new dwelling purchase by owner-occupiers (0.9 percent). These rises were partially offset by falls in domestic holiday travel & accommodation (-3.2 percent), fruit (-4.4 percent) and automotive fuel (-2.5 percent).




Thursday July 20 2017
Australia Jobless Rate Steady At 7-Month Low of 5.6% In June
ABS | Charles | charles@tradingeconomics.com

Australia's seasonally adjusted unemployment rate remained unchanged at 5.6 percent in June of 2017 from an upwardly revised 5.6 percent in May and consistent with market estimates. The jobless rate remained at its lowest level since October 2016, as the economy added 14,000 jobs while the number of unemployed increased by 13,100.

In June, the seasonally adjusted labour force participation rate increased to a 17-month high of 65.0 percent from 64.9 percent in the previous period, above market expections of 64.9 percent.

Employment increased by 14,000 to 12,166,900, slightly short of market estimates of a 15,000 increase: full-time employment increased by 62,000 to 8,356,000 while part-time employment decreased by 48,000 to 3,810,800.

Unemployment rose by 13,100 to 728,100. The number of unemployed persons looking for full-time work advanced by 9,200 to 500,600 and the number of unemployed persons only looking for part-time work rose 3,900 to 227,500.

Of those employed, underemployment still hovered near record highs at 9.3 percent.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 8.9 million hours (+0.5 percent) to 1,703.5 million hours, and the seasonally adjusted employment to population ratio stood steady at 61.3 per cent.



Thursday July 06 2017
Australia Trade Surplus Widens 2,646% MoM In May
ABS | Charles | charles@tradingeconomics.com

Australia's trade surplus widened 2646 percent to AUD 2471 billion in May of 2017 from a downwardly revised AUD 0.09 billion in April. The figure came in above market expectations of AUD 1.1 billion as exports strongly bounced back after cyclone disruptions last month reduced coal supplies.

Compared to the prior month, sales of goods and services increased by 9 percent to AUD 32.78 billion. It is the biggest jump since November of 2016.

Exports of rural goods rose 3 percent to AUD 4.2 billion, mainly due to a 15 percent increase in cereal grains & cereal preparations which was partially offset by a 20 percent decline in wool and sheepskins.

Exports of non-rural goods (bulk commodities and non-bulk commodities) were up 13 percent to AUD 20.70 billion, as coal, coke & briquettes recovered from a 45 percent drop in April, to a 62 percent increase in May.

Partially offsetting these gains were "other non-rurals, including sugar & beverages" (-11 percent) and metal ores & minerals (-7 percent).

Exports 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) rose 3 percent to AUD 1.52 billion.

Exports of services went up AUD 84 million, or 1 percent, to AUD 6.39 billion mainly due to an increase in travel (+2 percent).

Imports of goods and services edged up 1 percent to AUD 30.31 billion. Intermediate and other merchandise goods contributed the most to this rise (+5 percent) which was itself buoyed by a sharp increase in fuels & lubricants (+17 percent). In contrast, imports of non-monetary gold fell 25 percent.

Imports of services rose AUD 29 million to AUD 6.47 billion. The main component contributing to the rise was "other services" (+1 percent) and travel (+1 percent).

Cumulatively from January to May 2017, the trade surplus was recorded at AUD 10 billion.