• Petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 0.3 cents to 111.6 cents per litre in the week to February 7. It was the ninth fall in the national petrol price in 10 weeks.
• Regional price slumps: In Australian dollar terms the Singapore gasoline price fell by $7.92 a barrel last week or 11 per cent to $63.91 a barrel or 40.19 cents a litre. The figure of 40.19 a litre is the lowest result in seven years.
• Gross retail margins: The gross retail margin for unleaded petrol stands at 9.4 cents a litre. The gross retail margin for diesel petrol stands at 25.3 cents a litre.
• Job advertisements: Job advertisements rose by 1.0 per cent in January after falling by 0.1 per cent in December. Job ads are up 10.8 per cent on a year ago. Job ads have only fallen for two of the past ten months. Job ads are at the highest level since July 2012.

What does it all mean?

• The job market continues to strengthen, underpinned by the low growth of labour costs and firm demand for workers across the services sector. The unemployment rate stands at a 26-month low pf 5.76 per cent and it has potential to trend lower to the “full employment” region of 5.0-5.5 per cent during 2016.
• Modest real wage growth, rising wealth levels and a stronger job market confirm the encouraging operating conditions for consumer-focussed businesses in 2016.
• One interesting result from the job ads data concerns newspaper job ads – hitting the lowest levels since records began in 1975. Clearly, the practice of advertising new positions in newspapers is in its death throes.
• More capital cities are experiencing petrol prices near $1 a litre. And subject to the vagaries of the discounting cycle, more motorists will be filling up near $1 a litre in the next fortnight. The national petrol price is the lowest in a year, and given trends in regional gasoline prices and the Australian wholesale price, average pump prices have scope to fall further.
• But in Sydney, petrol is still selling below cost and below $1 a litre. The situation is unsustainable and pump prices have scope to rebound.
• Compared with October last year, the average household is saving around $27 a month on filling up the car with petrol, equivalent to a quarter percent rate cut on a $180,000 mortgage.

What do the figures show?

Petrol prices

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 0.3 cents per litre to 111.6 cents per litre in the week to February 7. The metropolitan petrol price rose by 0.3 cents to 109.2 cents per litre while the regional price fell by 1.3 cents to 116.5 cents per litre.
• The national average Australian price of diesel petrol fell by 1.5 cents to 115.9 cents per litre in the week to February 7. Last week the metropolitan price fell by 1.4 cents to 115.1 c/l, while the regional average price fell by 1.5 cents to 116.6 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 4.0 cents to 100.7 c/l), Melbourne (up by 1.8 cents to 104.2 c/l), Brisbane (up 5.9 cents to 118.4 c/l), Adelaide (down 2.1 cents to 113.2 c/l), Perth (down 0.6 cents to 114.9 c/l), Darwin (down by 0.5 cents to 125.2 c/l), Canberra (down 1.6 cents to 123.1 c/l) and Hobart (down by 2.3 cents to 124.0 c/l).
• Today the national average wholesale (terminal gate) unleaded petrol price stands at 101 cents per litre, down 1.4 cents per litre on a week ago. The terminal gate diesel price stands at 92.2 cents a litre, up 3.2 cents over the week.
• Last week the key Singapore gasoline price fell by US$5.05 or 9.9 per cent to US$45.95 a barrel. In Australian dollar terms the Singapore gasoline price fell by $7.92 a barrel or 11 per cent to $63.91 a barrel or 40.19 cents a litre. The figure of 40.19 cents a litre is the lowest result in seven years.
• MotorMouth records the following retail prices for capital cities today: Sydney 95.4c; Melbourne 119.9c; Brisbane 119.1c; Adelaide 107.9c; Perth 109.1c; Canberra 116.8c; Darwin 124.0c; Hobart 122.2c.

Job Advertisements

• Job advertisements rose by 1.0 per cent in January after falling by 0.1 per cent in December. Job ads have only fallen for two of the past ten months and stand at 3½ year highs. Newspaper advertisements fell by 3.2 per cent in the month to record lows. The far larger component of internet ads rose by 1.1 per cent. Job ads are up 10.8 per cent on a year ago. In trend terms, ads rose by 0.6 per cent in the month, the 28th consecutive monthly gain, to be up 11.2 per cent over the year.

What is the importance of the economic data?

• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• 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.

What are the implications for interest rates and investors?

• Regional gasoline prices continue to fall while the domestic wholesale price is near $1 a litre. Average pump prices have scope to fall a few more cents a litre.
• Filling up the car with petrol is the single biggest weekly purchase for most families. So the savings being reaped at the petrol bowser are extremely valuable. And arguably most people are treating the savings as windfall gains, benefitting consumer discretionary areas such as cafes, restaurants and take-away outlets.
• The latest lift in job ads will most likely be reflected in higher employment in the next 5-6 months. That is, it takes time from job application to the time that successful applicants take up their new positions.
• Lower petrol prices and a stronger job market point to further stability on interest rates settings.

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