Australian job advertisements disappoint
Home loans fell 0.5% m/m for November, as opposed to the 0.5% gain the market was anticipating and the 0.1% gain in October. Released at the same time was job advertisement data from ANZ, which fell 3.8% m/m during December. Both data releases point towards underlying weakness in key areas of the Australian economy, however the fall in job advertisements is more concerning as it may lead to an increase in the unemployment rate if it continues on its current trend. Jobs advertised online and in print media have been broadly falling since early 2011.
Australian labour market data is on tap for Thursday
Over the same period, the unemployment rate has been fairly steady at just above 5% but this has been matched by a drop in the Australian labour force participation rate. Hence, the diminishing labour force is keeping the unemployment rate steady. And, with the labour force participation rate already at lower levels than was witnessed during the 08/09 financial crisis, it is unclear how much further it can fall. Thus, if we see a continued fall in the number of jobs on offer then we expect to see a rise in the unemployment rate. Even now, we are looking for an increase in the unemployment rate in December to 5.4% from 5.2%, assuming the participation rate remains at 65.1%, which we think it will (Australia’s labour market data is due out on Thursday).
Data watch
In other news, an index for core inflation in Australia rose 0.4% m/m. However, we don’t expect inflation to be a problem for the RBA in the first half of this year, with the RBA’s measure of inflation predicted to remain in the middle of its 2-3% target range. In New Zealand, credit card spending rose 0.4% m/m for December, modestly lower than the prior month’s 0.7% increase.
Overnight there aren’t any massive headline data releases that the market will be focusing on, but it will be closely listening to a speech by Fed Chairman Bernanke late in the NY session. Overall, there is a slew of global data and corporate earnings out this week which may drive sentiment for the near-term, along with any political banter over the US debt ceiling.