Thursday May 17 2018
Australia Jobless Rate Rises to 9-Month High of 5.6%
ABS l Rida | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly edged up to 5.6 percent in April of 2018 from 5.5 percent in the prior month while markets expected 5.5 percent. It is the highest jobless rate since last July, as the economy added 22,600 jobs while the number of unemployed increased by 10,600.

In April, the number of unemployed went up by 10,600  to 741,000, as those looking for full-time work decreased by 17,100 to 506,100, while those looking for only part-time work rose by 27,600 to 234,900.

Employment increased by 22,600 to 12,501,000, above estimates of an increase of 20,000. Full-time employment increased by 32,700 to 8,543,400, while part-time employment dropped by 10,000 to 3.957,700. 

The labour force participation rate inched up to 65.6 percent from 65.5 percent in a month earlier and beating expectations of 65.5 percent. 

Seasonally adjusted monthly hours worked in all jobs increased by 19.4 million hours (1.11 percent) to 1,764.0 million hours. Meantime, the seasonally adjusted employment to population ratio remained steady at 61.9 percent in April.




Thursday May 03 2018
Australia Trade Surplus Largest in 10 Months
ABS l Rida Husna | rida@tradingeconomics.com

Australia's trade surplus widened by 13 percent to AUD 1.53 billion in March of 2018 from an upwardly revised AUD 1.35 billion in the prior month and far above market expectations of a AUD 0.7 billion surplus. It is the largest trade surplus since May 2017.

In March, exports increased by 1 percent month-on-month to AUD  34.84 billion. Sales of rural goods rose by 3 percent to AUD 3.96 billion, mainly due cereal grains and cereal preparations (34 percent). Also, sales of non-rural goods went up 1 percent to AUD 21.86 billion, mainly due to other manufactures (6 percent); machinery (8 percent) and other mineral fuels (2 percent), while those of non-monetary gold grew by 8 percent to AUD 1.83 billion. In addition, exports of services went up by 1 percent to AUD 7.20 billion, due to travel sales (1 percent). On the other hand, net exports of goods under merchanting fell by 14 percent to AUD 6 million. 

Imports expanded by 1 percent to AUD 33.31 billion. Purchases of intermediate and other merchandise goods increased by 4 percent to AUD 10.36 billion, driven by  fuels and lubricants (16 percent). Also, imports of non-monetary gold jumped by 48 percent to AUD 712 million. On the other hand, inbound shipments of consumption goods fell by 2 percent to AUD 8.72 billion, mostly due to non-industrial transport equipment (-5 percent); consumption goods n.e.s (-2 percent) and food and beverages, mainly for consumption (-3 percent). Also, imports of capital goods declined by 1 percent to AUD 6.13 billion, led by civil aircraft and confidentialised items (-35 percent) and machinery and industrial equipment (-4 percent). In addition, purchases of services dropped by 1 percent to AUD 7.40 billion, mainly due to travel purchases (-1 percent). 

Considering the first three months of 2018, the trade surplus came in at AUD 4.04 billion, down sharply from AUD 7.09 billion surplus in the same period the prior year.




Tuesday May 01 2018
Australia Holds Cash Rate at 1.5%
RBA l Rida Husna | rida@tradingeconomics.com

The Reserve Bank of Australia left the cash rate unchanged at a record low of 1.5 percent at its May meeting, as widely expected. Policymakers said that the economy is projected to grow a bit above 3 percent in 2018 and 2019 supported by positive business conditions and stronger growth in exports, while the outlook for household consumption remains a continuing source of uncertainty due to high debt levels.

Excerpt from the statement by the governor, Philip Lowe: 

The Bank's central forecast for the Australian economy remains for growth to pick up, to average a bit above 3 per cent in 2018 and 2019. This should see some reduction in spare capacity in the economy. 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. 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, although growth has slowed over recent months. 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 for some 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. The recent inflation data were in line with the Bank's expectations, with both CPI and underlying inflation running marginally 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 Australian dollar has depreciated a little recently, but on a trade-weighted basis 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.





Tuesday April 24 2018
Australia Q1 Inflation Rate Steady at 1.9%
ABS l Rida Husna | rida@tradingeconomics.com

Consumer prices in Australia rose by 1.9 percent through the year to the March quarter of 2018, the same as in the previous quarter and compared with market consensus of 2 percent. Cost of housing and transport increased at a softer pace while prices of food rebounded.

Year-on-year, cost increased less for: alcohol and tobacco (7 percent from 7.3 percent in the December quarter); housing (3.3 percent from 3.4 percent); transport (2.9 percent from 3.3 percent); education (2.6 percent from 3.2 percent) and insurance and financial services (1 percent from 1.3 percent), while inflation was steady for recreation and culture (0.6 percent). At the same time, cost of food went up 0.5 percent, rebounding from a 0.2 percent drop in the preceding quarter. It was the first food inflation since the second quarter 2017. Also, cost went up more for health (4.2 percent from 4 percent). 

On the other hand, cost continued to fall for: clothing and footwear (-3.5 percent from -3 percent); furnishing, household equipment and services (-0.1 percent from -0.8 percent) and communication (-3.4 percent from -3.4 percent). 

RBA Trimmed Mean CPI rose 1.9 percent year-on-year, compared to a 1.8 percent in the prior quarter and slightly below expectations of 2 percent. Quarter-on-quarter, the index increased by 0.5 percent, after a 0.4 percent rise in the prior three months and in line with estimates. RBA Weighted Mean CPI rose 2.0 percent year-on-year in the three months to March, similar from the December's quarter figure and slightly above expectations of 2 percent.

On a quarterly basis, consumer prices went up 0.4 percent, following a 0.6 percent gain in the previous period while markets estimated 0.5 percent. The most significant price rises this quarter were secondary education (3.3 percent), gas and other household fuels (6.0 percent), pharmaceutical products (5.6 percent), vegetables (3.7 percent) and medical and hospital services (1.5 percent). These rises were partially offset by falls in international holiday travel and accommodation (-2.4 percent), audio, visual, and computing media and services (-6.1 percent), and furniture (-2.8 percent).




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.