Thursday June 14 2018
Australia Jobless Rate Falls to 6-Month Low of 5.4%
ABS l Rida | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate unexpectedly dropped to 5.4 percent in May of 2018 from 5.6 percent in the prior month while markets expected 5.5 percent. It is the lowest jobless rate since last November, as the economy added 12,000 jobs while the number of unemployed declined by 26,800.

In May, the number of unemployed fell by 26,800  to 714,600, as those looking for full-time work decreased by 11,200 to 494,300, and those looking for only part-time work decreased  15,600 to 220,300.

Employment increased by 12,000 to 12,518,300, below estimates of an increase of 18,800. Full-time employment went down by 20,600 to 8,521,400, while part-time employment rose by 32,600 to 3.996,900. 

The labor force participation rate inched lower to 65.5 percent from 65.6 percent in a month earlier while markets 65.6 percent. 

Seasonally adjusted monthly hours worked in all jobs decreased by 24.2 million hours (1.4 percent) to 1,738.8 million hours. Meantime, the seasonally adjusted employment to population ratio declined by less than 0.1 percentage points to 61.9 percent in May.




Thursday June 07 2018
Australia Trade Surplus Smallest in 4 Months
ABS l Rida | rida@tradingeconomics.com

Australia's trade surplus narrowed by 44 percent to AUD 0.98 billion in April of 2018 from an upwardly revised AUD 1.73 billion in the prior month and matching market expectations. It is the smallest trade surplus since a deficit in last December, mainly due to a decline in exports.

In April, exports fell by 2 percent month-on-month to AUD  34.19 billion. Sales of non-rural goods dropped by 2 percent to AUD 21.35 billion, mainly due to coal, coke and briquettes (-7 percent); and metal ores and minerals (-4 percent). Also, sales of rural goods fell by AUD 8 million to AUD 4 billion, mainly due cereal grains and cereal preparations (-12 percent); and those of non-monetary gold decreased by 16 percent to AUD 1.53 billion. On the other hand, exports of services went up by 1 percent to AUD 7.3 billion, due to travel sales (1 percent); and other services (1 percent). In addition, net exports of goods under merchanting increased by 83 percent to AUD 11 million. 

Imports were unchanged at AUD 33.21 billion. Purchases of consumption goods declined by 2 percent to AUD 8.46 billion, mostly due to non-industrial transport equipment (-6 percent); consumption goods n.e.s (-1 percent). textiles, clothing and footwear (-2 percent); and food and beverages, mainly for consumption (-2 percent). Also, imports of non-monetary gold tumbled 15 percent to AUD 608 million. On the other hand, purchases of intermediate and other merchandise goods increased by 1 percent to AUD 10.45 billion, driven by fuels and lubricants (4 percent); and primary industrial supplies, n.e.s (68 percent). In addition, inbound shipments of capital goods rose by 2 percent to AUD 6.22 billion, led by civil aircraft and confidentialised items (32 percent) and ADP equipment (-15 percent). At the same time, imports of services grew by 1 percent to AUD 7.48 billion, mainly due to travel purchases (1 percent); and other services (1 percent).

Considering the first four months ofthe year, the trade surplus came in at AUD 5.25 billion, down sharply from AUD 6.84 billion surplus in the same period the prior year.





Wednesday June 06 2018
Australia Q1 GDP Growth Beats Estimates
ABS l Rida | rida@tradingeconomics.com

The Australian economy advanced 1 percent in the March quarter of 2018, above market consensus of a 0.9 percent expansion and after an upwardly revised 0.5 percent growth in the previous quarter. It is the highest growth rate since the second quarter 2017, mainly boosted by a rebound in exports.

In the three months to March, the largest contribution to growth came from exports (0.5 percentage points), followed by government spending (0.3 pp), household consumption (0.2 pp) and non-dwelling construction (0.1 pp). In addition, changes in inventories added 0.2 percentage points to growth.

Exports of goods and services rose by 2.4 percent, recovering from a 1.5 percent fall in the prior quarter. Sales of goods increased by 2.9 percent, with non-rural exports rising 3.3 percent. Exports of services went up 0.7 percent. Imports of goods and services grew by 0.5 percent, much slower than a 1.6 percent rise in the previous period. Purchases of goods rose 1.3 percent, mainly driven by a rise in capital goods (4.3 pct). 

Final consumption expenditure rose 0.6 percent, after a 1.3 pecent rise in Q4. Household spending increased 0.3 percent, driven by insurance and other financial services (0.7 pct), food (0.5 pct), and electricity, gas and other fuels (2.3 pct). Government spending rose by 1.6 percent, compared to a 2.2 percent gain in Q4. The rise was mainly due to state and local government (1.4 pct )and national government (1.7 pct).

Gross fixed capital formation expanded 0.5 percent (from -0.9 percent in Q4). Private investment went up 1.2 percent, due to non-dwelling construction (1.6 pct). Also, increases were seen in dwellings (0.9 pct) and machinery and equipment (1.1 pct). In contrast, public investment declined 2 percent, driven by state and local general government (-2.2 pct). Both the private and public sector were impacted by the transfer of an asset from the previous quarter. 

Total inventories increased AUD 1.2 billion following a rise of AUD 390 million in the prior quarter. The increase was driven by a build up in wholesale trade inventories, which exhibited its largest rise in over five years. Partially offsetting the rise was retail rade and mining.

By industry, mining rose 2.9 percent, driven by oil and gas extraction (8.4 pct), coal mining (2.9 pct) and iron ore mining (0.5 pct). This quarter featured the biggest rise in coal mining since Q3 2014, due to strong demand for thermal coal. Also, wholesale trade grew by 1.2 percent, driven by a rise in other goods and grocery, liquor and tobacco product wholesaling. Financial and insurance services increased by 0.6 percent, supported by a rise in other financial and insurance services (1.8 pct). At the same time, healthcare and social assistance advanced 2.1 percent, driven by rises in both private and public health. Administrative and support services went up 3 percent, the most since the December quarter 2010, driven by  a rise in specialised services to businesses. In addition, professional, scientific and technical services expanded 0.8 percent, the tenth straight quarter of growth, mainly due to  a rise in other professional, scientific and technical services (2.5 pct).

On the other hand, agriculture fell 1.7 percent, the fourth straight quarterly drop. Also, output declined for: construction (-0.7 percent), due to falls in building construction (-0.6 pct) and construction services (-1.7 pct);  information, media and telecommunications (-0.4 percent), driven by telecommunications services (-0.5 pct) and other information and media services (-0.3 pct); and electricity, gas, water and waste services (-0.1 pct). 

Through the year to the first quarter, the economy grew 3.1 percent, following a 2.4 percent expansion in the prior quarter and above expectations of a 2.8 percent growth. It is the fastest annual growth rate since Q2 2016.




Tuesday June 05 2018
Australia Leaves Monetary Policy Unchanged
RBA l Rida | rida@tradingeconomics.com

The Reserve Bank of Australia left the cash rate unchanged at a record low of 1.5 percent at its June meeting, as widely expected. Policymakers said the Australian economy is projected to grow a bit above 3 percent in 2018 and 2019, supported by positive business conditions and rising non-mining investment; while inflation is likely to remain low for some time.

Excerpt from the statement by the governor, Philip Lowe: 

The recent data on the Australian economy have been consistent with the Bank's central forecast for GDP growth to pick up, to average a bit above 3 per cent in 2018 and 2019. 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. 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 been little changed at around 5½ percent for much of the past year. The various forward-looking indicators continue to point to solid growth in employment in the period ahead, with a gradual reduction in the unemployment rate expected. 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 is low and is likely to remain so 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 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. Housing credit growth has slowed over the past year, especially to investors. 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. While there may be some further tightening of lending standards, the average mortgage interest rate on outstanding loans is continuing to decline.

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 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.