Job Advertisements; Chinese trade
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The unemployment rate rose in August.
Hiring again: Job advertisements rose by 1.5 per cent in August to a 17-month high.
- Bigger Chinese trade surplus: The Chinese trade surplus rose from US$47.3 billion to a record high of US$49.8 billion in August. Exports were 9.4 per cent higher over the year.
What does it all mean?
- The continued lift in hiring intentions by employers casts further doubt on recent data showing a jump in the jobless rate. In July, the unemployment rate rose from 6.0 per cent to 6.4 per cent, but in the background job ads continue to rise, now hitting the highest levels in 17 months. Job ads are a forward-looking indicator of the job market as opposed to the employment and unemployment data which reflect decisions made by employers up to six months earlier.
- The lift in job ads is clearly good news for consumer-facing businesses.
- The continued lift in Chinese exports is encouraging for Australian producers. Essentially the data tells us that demand in the US, other parts of Asia and selected countries in Europe and South America are rising. For a commodity producer such as Australia, that is good news – especially for the coal and iron ore sector that are facing falling prices at present.
- Of course the most favourable situation would be where Chinese exports and imports are both growing healthy annual rates. The softness in the Chinese property sector is keeping a lid on domestic economic conditions.
What do the figures show?
Job Advertisements
- Job advertisements rose by 1.5 per cent in August to a 17-month high after a 0.5 per cent gain in July. Newspaper advertisements rose by 1.8 per cent in the month and internet ads rose by 1.4 per cent. Job ads were up 7.7 per cent on a year ago. In trend terms, ads rose by 0.3 per cent, the 10th straight gain.
China trade data
- The Chinese trade surplus rose from US$47.3 billion to a record high of US$49.8 billion in August. Economists had forecast a US$40 billion surplus. Exports were up 9.4 per cent on a year ago (forecast +8.0 per cent) while imports fell 2.4 per cent (forecast +1.7 per cent). In July, exports were up 14.5 per cent on a year earlier with imports down 1.6 per cent.
- The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.
- China’s National Bureau of Statistics releases its monthly economic statistics around mid-month. Quarterly GDP data is released around the 16th of January, April, July and October. China’s Customs Office releases trade data, and the People’s Bank of China releases financial statistics, around the 10th of each month. China is Australia’s largest trading partner and changes in the Chinese economic have major implications for the Aussie economy.
- The lift in the number of jobs being advertised will translate into higher employment over the next 5-6 months and hopefully lower unemployment. The lift in hiring intentions provides confidence to those in jobs. And the lift in job numbers will support higher spending. Overall the data is positive for retailers.
- The Aussie dollar was unmoved near US93.65 cents after the Chinese trade data.
What is the importance of the economic data?
- The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.
- China’s National Bureau of Statistics releases its monthly economic statistics around mid-month. Quarterly GDP data is released around the 16th of January, April, July and October. China’s Customs Office releases trade data, and the People’s Bank of China releases financial statistics, around the 10th of each month. China is Australia’s largest trading partner and changes in the Chinese economic have major implications for the Aussie economy.
What are the implications for interest rates and investors?
- The lift in the number of jobs being advertised will translate into higher employment over the next 5-6 months and hopefully lower unemployment. The lift in hiring intentions provides confidence to those in jobs. And the lift in job numbers will support higher spending. Overall the data is positive for retailers.
- The Aussie dollar was unmoved near US93.65 cents after the Chinese trade data.