Thursday September 13 2018
Australia August Jobless Rate Matches Estimates
Australian Bureau of Statistics l Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's seasonally adjusted unemployment rate stood at 5.3 percent in August of 2018, the same as in the prior month and matching market consensus. The jobless rate remained at its the lowest level since November 2012, as the economy added 44,000 jobs while the number of unemployed increased by 5,800.

In August, the number of unemployed rose by 5,800 to 708,800, as people looking for only part-time work increased by 13,200 to 214,000, while those looking for full-time work decreased by 7,500 to 494,800.
 
Employment went up by 44,000 to 12,631,300, missing estimates of an increase of 15,000. Part-time employment increased by 10,200 to 4,000,600 while full-time employment went up by 33,700 to 8,603,700.
 
The labor force participation rate rose by 0.1 points from a month earlier to 65.7 percent while markets estimated 65.6 percent. Meantime, the employment to population ratio went up by 0.1 percentage points to 62.2 percent.
 
Seasonally adjusted monthly hours worked in all jobs increased by 0.6 million hours, or 0.03 percent, to 1,750.9 million hours.
 




Thursday September 06 2018
Australia Trade Surplus Narrows 20% in July
Australian Bureau of Statistics l Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's trade surplus narrowed by 20 percent month-over-month to AUD 1.55 billion in July of 2018 from an upwardly revised AUD 1.94 billion in the prior month and above market expectations of a AUD 1.4 billion surplus, as exports fell while imports showed no change.

Exports from Australia decreased by 1 percent month-on-month to AUD 36.07 billion in July 2018. Sales of non-rural goods dropped 1 percent to AUD 22.79 billion, mainly due to metal ores and minerals (-5 pct); other non-rural (-29 pct); and other mineral fuels (-1 pct). In addition, exports of rural goods went down 2 percent to AUD 4.06 billion, dragged by cereal grains & cereal preparations (-11 pct); and wool and sheepskins (-8 pct). Also, sales of non-monetary gold tumbled 10 percent to AUD 1.79 billion. Exports of services were almost unchanged at AUD 7.42 billion, due to travel sales which declined 1 percent while sales of other services increased by 2 percent. Meantime, net exports of goods under merchanting jumped 175 percent to AUD 11 million.

Imports were almost unchanged month-over-month at AUD 34.52 billion in July. Purchases of intermediate and other merchandise goods rose by 6 percent to AUD 11.32 billion, driven by fuels and lubricants (23 pct). Also, purchases of non-monetary gold went up 11 percent to AUD 707 million. Imports of services increased 1 percent to AUD 7.75 billion, led by travel (2 pct); transport (2 pct); and other services(1 pct). In contrast, purchases of capital goods declined 6 percent to AUD 6.17 billion, due to civil aircraft and confidentialised items (-49 pct); telecommunications equipment (-4 pct); machinery and industrial equipment (-2 pct); ADP equipment(-4 pct); and industrial transport equipment n.e.s. (-3 pct). In addition, imports of consumption goods declined 4 percent to AUD 8.58 billion, mainly due to textiles, clothing and footwear (-9 pct); consumption goods n.e.s. (-2 pct); and food and beverages, mainly for consumption (-4 pct).
 
Considering the first seven months of the year, the trade surplus narrowed to AUD 8.21 billion from AUD 10.54 billion in the same period of 2017.
 
 




Wednesday September 05 2018
Australia Q2 GDP Growth Stronger than Expected
ABS l Rida | rida@tradingeconomics.com

The Australian economy advanced 0.9 percent in the June quarter of 2018, above market consensus of a 0.7 percent expansion and after an upwardly revised 1.1 percent growth in the previous quarter. Growth was mainly supported by strength in domestic demand and foreign trade while fixed investment was flat.

In the three months to June, the largest contribution to GDP growth came from final consumption expenditure (0.6 percentage points), namely household consumption (0.4 pp) and government spending (0.2 pp). Also, exports added 0.2 percentage points to growth, while changes in inventories were neutral. On the other hand, non-dwelling construction substracted 0.1 percentage points off growth.

Final consumption expenditure rose 0.7 percent. Household spending increased 0.7 percent (vs 0.5 percent in Q1), driven by rises in food (1.3 pct), recreation and culture (1 pct) and insurance and other financial services (0.9 pct). Government spending went up 1 percent (vs 1.6 pct in Q1), due to state and local government (0.4 pct ) and national government (1.9 pct).

Gross fixed capital formation was flat. Private investment recorded no movement, with a rise in total dwellings (1.7 pct) offset by falls in machinery and equipment (-1.6 pct), and non-dwelling construction (-1.2 pct). Public investment was also flat. A rise for the general government sector (2.2 pct) was offset by a fall for public corporations (-5.8 pct).

Total inventories increased AUD 1.16 billion following a rise of AUD 1.24 billion in the prior quarter. The increase was driven by wholesale trade inventories, which recorded a strong build up for the second straight quarter. Also, public authorities and mining industry inventories increased during the quarter.

Exports of goods and services rose by 1.1 percent (vs 3 percent in Q1. Sales of goods increased by 1.1 percent, with non-rural exports (1.4 pct) and rural exports (3.9 pct) rising. Sales of services went up 1.2 percent. Imports of goods and services grew by 0.4 percent (vs 1.7 percent in Q1). Purchases of goods rose 1.7 percent, driven by both capital (4.4 pct) and consumption goods (1.6 pct). There was a decline in imports of intermediate goods (-1.0 pct). Imports of services fell 3.8 percent. 

By industry, agriculture grew by 0.8 percent  after experiencing four consecutive falls. The rebound was supported by rises in both livestock and grains. Also, mining rose 1.5 percent, driven by coal mining (4.7 pct), exploration and other mining support services (4.2 pct) and oil and gas extraction (1.5 pct). This quarter featured the biggest rise in coal mining since Q3 2014, due to strong demand for thermal and hard coking coal. In addition, construction grew 1.9 percent, due to building construction (1.5 pct), heavy and civil engineering (2.6 pct) and construction services (1.8 pct). Retail trade rose 1.1 percent, driven by food retailing and other store-based retailing. Information, media and telecommunications increased 1.8 percent after a fall in Q1. The rebound was explained by telecommunications services (2.8 pct) and other information and media services (0.6 pct). Financial and insurance services increased by 0.7 percent, supported by a rise in other financial and insurance services (1.5 pct). At the same time, rental, hiring & real estate services grew 1.7 percent, supported by property operators and real estate services (1.8 pct) and rental, hiring and real estate services (0.9 pct). Health care rose 1.3 percent, boosted by rises in both public and private health. On the other hand, manufacturing sector fell 1.5 percent following a  strong growth in Q1. The decline was driven by other manufacturing (-3.7 pct), petroleum, coal, chemical and rubber products (-3.2 pct) and machinery and equipment (-1.7 pct).

Through the year to the second quarter, the economy grew 3.4 percent, following a 3.2 percent expansion in the prior quarter and beating expectations of a 2.8 percent growth. It is the fastest annual pace of expansion since Q3 2012.




Tuesday September 04 2018
Australia Holds Cash Rate at 1.5% in September
RBA l Rida | rida@tradingeconomics.com

The Reserve Bank of Australia kept the cash rate at a record low of 1.5% at its September meeting, as widely expected, extending its record period of policy inaction beyond two years, amid weak inflation and low wage growth.

Excerpt from the statement by the governor, Philip Lowe: 

Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. One ongoing uncertainty regarding the global outlook stems from the direction of international trade policy in the United States.

The Bank's central forecast is for growth of the Australian economy to average a bit above 3 per cent in 2018 and 2019. In the first half of 2018, the economy is estimated to have grown at an above-trend rate. Business conditions are positive and non-mining business investment is expected to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high. The drought has led to difficult conditions in parts of the farm sector.

Australia's terms of trade have increased over the past couple of years due to rises in some commodity prices. While the terms of trade are expected to decline over time, they are likely to stay at a relatively high level. The Australian dollar remains within the range that it has been in over the past two years on a trade-weighted basis, but it has depreciated against the US dollar along with most other currencies.

The outlook for the labour market remains positive. The unemployment rate has fallen to 5.3 per cent, the lowest level in almost six years. The vacancy rate is high and there are reports of skills shortages in some areas. A further gradual decline in the unemployment rate is expected over the next couple of years to around 5 per cent. Wages growth remains low, although it has picked up a little recently. The improvement in the economy should see some further lift in wages growth over time, although this is likely to be a gradual process.

Inflation is around 2 per cent. The central forecast is for inflation to be higher in 2019 and 2020 than it is currently. In the interim, once-off declines in some administered prices in the September quarter are expected to result in headline inflation in 2018 being a little lower, at 1¾ per cent.

Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Housing credit growth has declined to an annual rate of 5½ per cent. This is largely due to reduced demand by investors as the dynamics of the housing market have changed. Lending standards are also tighter than they were a few years ago, partly reflecting APRA's earlier supervisory measures to help contain the build-up of risk in household balance sheets. There is competition for borrowers of high credit quality.

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 August 16 2018
Australia July Jobless Rate Falls to Near 6-Year Low of 5.3%
ABS l Rida | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly inched lower to 5.3 percent in July of 2018 from 5.4 percent in the prior month and below market consensus of 5.4 percent. It was the lowest jobless rate since November 2012, as the economy lost 3,900 jobs and the number of unemployed declined by 5,700.

In July, the number of unemployed fell by 5,700 to 706,000, as people looking for only part-time work decreased by 8,000 to 201,900, while those looking for full-time work increased by 2,300 to 504,100.

Employment declined by 3,900 to 12,575,200, missing estimates of an increase of 15,000 and marking the first drop since February. Part-time employment decreased by 23,200 to 3,987,700 while full-time employment went up by 19,300 to 8,587,500.

The labor force participation rate decreased by 0.1 points from a month earlier to 65.5 percent while markets estimated 65.7 percent. Meantime, the employment to population ratio went down by 0.1 percentage points to 62.1 percent.

Seasonally adjusted monthly hours worked in all jobs increased by 4 million hours, or 0.2 percent, to 1,749.6 million hours.


Tuesday August 07 2018
Australia Leaves Monetary Policy Unchanged for Two Years
RBA l Rida | rida@tradingeconomics.com

The Reserve Bank of Australia left the cash rate unchanged at a record low of 1.5 percent for two years running at its August meeting. It is the longest policy pause in the central bank's modern history, amid sluggishness in inflation and wages.

Excerpt from the statement by the governor, Philip Lowe: 

Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. One uncertainty regarding the global outlook stems from the direction of international trade policy in the United States.

The Bank's central forecast for the Australian economy remains unchanged. GDP growth is expected to average a bit above 3 per cent in 2018 and 2019. This should see some further reduction in spare capacity. Business conditions are positive and non-mining business investment is continuing to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high. The drought has led to difficult conditions in parts of the farm sector.

Australia's terms of trade have increased over the past couple of years due to rises in some commodity prices. While the terms of trade are expected to decline over time, they are likely to stay at a relatively high level. The Australian dollar remains within the range that it has been in over the past two years.

The outlook for the labour market remains positive. The vacancy rate is high and other forward-looking indicators continue to point to solid growth in employment. Employment growth continues to be faster than growth in the working-age population. A further gradual decline in the unemployment rate is expected over the next couple of years to around 5 per cent. Wages growth remains low. This is likely to continue for a while yet, although the improvement in the 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 increased reports of skills shortages in some areas.

The latest inflation data were in line with the Bank's expectations. Over the past year, the CPI increased by 2.1 per cent, and in underlying terms, inflation was close to 2 per cent. The central forecast is for inflation to be higher in 2019 and 2020 than it is currently. In the interim, once-off declines in some administered prices in the September quarter are expected to result in headline inflation in 2018 being a little lower than earlier expected, at 1¾ per cent.

Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Housing credit growth has declined to an annual rate of 5½ per cent. This is largely due to reduced demand by investors as the dynamics of the housing market have changed. Lending standards are also tighter than they were a few years ago, partly reflecting APRA's earlier supervisory measures to help contain the build-up of risk in household balance sheets. There is competition for borrowers of high credit quality.

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 August 02 2018
Australia June Trade Surplus Largest in 13 Months
Australian Bureau of Statistics l Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's trade surplus widens sharply 158 percent to AUD 1.87 billion in June of 2018 from a downwardly revised AUD 0.73 billion in the prior month and far above market expectations of a AUD 0.9 billion surplus. It is the largest trade surplus since May last year, as exports rose to an all-time high while imports declined.

Exports increased by 3 percent month-on-month to an all-time high of AUD 36.44 billion in June. Sales of non-rural goods rose by 2 percent to AUD 22.92 billion, mainly due to metal ores and minerals (1 percent); other mineral fuels (1 percent); other manufactures (6 percent); and transport equipment (16 percent). In addition, exports of non-monetary gold increased by 6 percent to AUD 1.98 billion while those of rural goods went up 5 percent to AUD 4.16 billion, mainly due to meat and meat preparations (2 percent), cereal grains and cereal preparations (10 percent) and other rural products (6 percent). Exports of services went up by 1 percent to AUD 7.39 billion, due to a rise in travel sales (2 percent) while other services were almost unchanged. 
 
Imports fell 1 percent to AUD 34.57 billion in June. Imports of intermediate and other merchandise goods went down by 4 percent to AUD 10.74 billion, mainly dragged down by fuels and lubricants (-11 percent); processed industrial supplies (-2 percent); parts for transport equipment (-5 percent); other parts for capital goods (-1 percent). Also, purchases of non-monetary gold tumbled 15 percent to AUD 0.64 billion. Meantime, purchases of consumption goods were almost unchanged at AUD 8.96 billion, mostly due to a fall in non-industrial transport equipment (-3 percent) was offset by a rise in both textiles, clothing and footwear (2 percent); food and beverages (2 percent), and household electrical items (1 percent). Imports of services were almost unchanged at AUD 7.62 billion, as an increase in purchases of other services (1 percent) was offset by a drop in transport ( -3 percent); travel (-1 percent). By contrast, inbound shipments of capital goods increased by 5 percent to AUD 6.61 billion, led by industrial transport equipment n.e.s (9 percent); civil aircraft and confidentialised items (13 percent).capital goods n.e.s (14 percent), and ADP equipment (6 percent).
 
Considering the first half of the year, the trade surplus narrowed to AUD 6.55 billion from AUD 10.16 billion in the same period of 2017.
 
 


Wednesday July 25 2018
Australia Q2 Inflation Rate Highest in Over a Year
ABS | Rida | rida@tradingeconomics.com

Australia's consumer price inflation rose to 2.1 percent year-on-year in the second quarter of 2018 from 1.9 percent in the previous period, but slightly below market expectations of 2.2 percent. Still, it was the highest rate since the first quarter of 2017, mainly due to higher prices of fuel, electricity and tobacco.

Transport cost increased by 5.2 percent year-on-year in the second quarter of the year, following a 2.9 percet rise in the previous three-month period, driven by a jump in automotive fuel prices (16.3 percent vs 6.1 percent). Also, prices rose faster for: alcohol and tobacco (7.8 percent vs 7 percent in Q1), mainly tobacco (16.6 percent vs 14.5 percent); recreation and culture (0.8 percent vs 0.6 percent); education (2.7 percent vs 2.6 percent); and insurance and financial services (1.5 percent vs 1 percent).

On the other hand, inflation eased for food and non-alcoholic beverages (0.3 percent vs 0.5 percent); housing (3.1 percent vs 3.3 percent), of which electricity (10.4 percent vs 11.7 percent); and health (3.4 percent vs 4.2 percent). Also, prices declined further for clothing and footwear (-2 percent vs -3.5 percent) furnishings, household equipment and services (-0.5 percent vs -0.1 percent) and communication (-4.2 percent vs -3.4 percent). 

RBA Trimmed Mean CPI rose 1.9 percent year-on-year, the same as in the first quarter and matching expectations. Quarter-on-quarter, the index increased by 0.5 percent, unchanged from the prior three months and in line with estimates. RBA Weighted Mean CPI rose 1.9 percent year-on-year in the three months to June, following a 2 percent rise in the March quarter and in line with forecasts.

On a quarterly basis, consumer prices went up 0.4 percent in the second quarter, the same pace as in the previous period and slightly below market consensus of 0.5 percent. The most significant price rises were automotive fuel (6.9 percent), medical and hospital services (3.1 percent) and tobacco (2.8 percent). By contrast, price falls were observed in domestic holiday travel and accommodation (-2.7 percent), motor vehicles (-2 percent) and vegetables (-2.9 percent).





Thursday July 19 2018
Australia Jobless Rate Unchanged at 6-Month Low
ABS | Rida | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate stood at 5.4 percent in June of 2018, the same as in the prior month and in line with market consensus. The jobless rate remained at the lowest level since last November.

In June, the number of unemployed fell by 1,100 to 714,100, as those looking for only part-time work decreased by 6,100 to 212,200, while those looking for full-time work increased by 5,100 to 501,900.

Employment rose by 50,900 to 12,573,600, far above estimates of an increase of 17,000 and marking the largest monthly gain since November 2017. Full-time employment went up by 41,200 to 8,565,200, while part-time employment advanced by 9,700 to 4,008,400. 

The labor force participation rate increased to 65.7 percent in June from 65.5 percent a month earlier and beat forecasts of 65.5 percent. It was the highest reading since February and only a tick below an all time high of 65.8 percent recorded in November 2010. Meantime, the employment to population ratio went up by 0.1 percentage points to 62.1 percent in June.

Seasonally adjusted monthly hours worked in all jobs increased by 10.7 million hours, or 0.6 percent, to 1,750.7 million hours.


Wednesday July 04 2018
Australia Trade Surplus Widens Sharply in May
Australian Bureau of Statistics | Chusnul Ch Manan | chusnul@tradingeconomics.com

Australia's trade surplus widened by 75 percent to AUD 0.83 billion in May of 2018 from a downwardly revised AUD 0.47 billion in the prior month but below market expectations of a AUD 1.2 billion surplus.

Exports increased by 4 percent month-on-month to an all-time high of AUD 35.56 billion in May. Sales of non-rural goods rose by 4 percent to AUD 22.43 billion, mainly due to metal ores and minerals (4 percent); coal, coke and briquettes (6 percent); other mineral fuels (9 percent); other manufactures (3 percent); and machinery (4 percent). In addition, exports of non-monetary gold increased by 22 percent to AUD 1.87 billion while those of rural goods were almost unchanged at AUD 3.99 billion. An increase in sales of meat and meat preparations (4 percent), cereal grains and cereal preparations (2 percent) and wool and sheepskins (11 percent) was offset by a decline in other rural products (-6 percent). Exports of services went up by 1 percent to AUD 7.26 billion, due to travel sales (1 percent) and other services (1 percent). 
 
Imports rose at a softer 3 percent also to a record high of AUD 34.74 billion in May. Purchases of consumption goods increased by 6 percent to AUD 8.95 billion, mostly due to non-industrial transport equipment (2 percent); consumption goods n.e.s (7 percent); textiles, clothing and footwear (7 percent); and food and beverages (6 percent). Also, imports of intermediate and other merchandise goods went up by 4 percent to AUD 11.06 billion, driven by fuels and lubricants (4 percent); processed industrial supplies (6 percent); parts for transport equipment (12 percent); and other parts for capital goods (2 percent). Purchases of non-monetary gold jumped 23 percent to AUD 0.75 billion. By contrast, inbound shipments of capital goods declined by 2 percent to AUD 6.12 billion, led by civil aircraft and confidentialised items (-10 percent) and ADP equipment (-10 percent). Imports of services were almost unchanged at AUD 7.85 billion, as purchases of both travel and other services showed no growth while those of transport rose 3 percent. 
 
Considering the first five months of the year, the trade surplus narrowed to AUD 4.88 billion from AUD 9.13 billion in the same period of 2017.