• It is hard to argue that the petrol discounting cycles on the eastern seaboard are acting in the interests of motorists. Last week the national average petrol price jumped by a record 7.3 cents a litre after falling by almost 3 cents a litre in the previous week. Certainly there have been no similar sharp swings in world oil prices. Probably the best guide at present to the ‘true’ or ‘underlying’ Australian petrol price is the Perth market, which follows a set weekly cycle. The average Perth petrol price rose by 1.8 cents a litre last week in response to a similar lift in the wholesale price in the previous week.
• In Sydney, Melbourne, Brisbane and Adelaide, unleaded petrol prices peaked over last Tuesday and Wednesday and have since fallen by between 3-7 cents a litre. So the Australian average petrol price will likely ease over the week. In an underlying sense though, higher world oil prices and a weaker Aussie dollar have conspired to lift the wholesale price to a 12-week high of over 142 cents a litre. This should be seen as close to a “floor” price. Certainly motorists should see it as an attractive proposition if they are able to fill up below 142 cents a litre.
• The volatility of petrol prices is hardly positive for consumer spending in the lead up to Christmas.
• In the past, the job ads series gave a good sense about where employment was heading. But nowadays job seekers use social media to find the jobs they want as well as going directly to company websites. While job ads are down again, it is unsure whether this reflects reduced use of advertisements as a hiring medium or whether businesses are still cautious about hiring.

What do the figures show?

Petrol prices:

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by a record 7.3 cents a litre to 153.4 c/l in the week to December 8. The lift in prices reflects the end of discounting cycles in major capital cities.
• The metropolitan price soared by 9.6 c/l to 152.8 c/l, while the regional average price rose by 2.7 c/l to 154.7 c/l. The average diesel price was up by 2.1 cents a litre to 160.2 cents.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 11.0 cents to 151.8 c/l), Melbourne (up by 12.0 cents to 152.0 c/l), Brisbane (up 10.7 cents to 155.4 c/l), Adelaide (up 11.8 cents to 153.8 c/l), Perth (up 1.8 cents to 149.2 c/l), Darwin (up 0.6c to 168.9 c/l), Canberra (up 1.3c at 157.5 c/l) and Hobart (up 0.1 cents to 161.0 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands at 142.4 c/l, up 1.1c over the week and up almost 8 cents from the five-month low set on October 31.
• Last week the key Singapore unleaded petrol price rose by US$1.70 (1.5 per cent) to a 13-week high of US$118.30 a barrel. And in Australian dollar terms the Singapore gasoline price rose by $2.29 (1.8 per cent) last week to a 13-week high of $130.60 a barrel or 82.14 cents a litre.

Job advertisements:

• The combined number of internet and newspaper job advertisements, as tracked by ANZ, fell by 0.8 per cent in November to stand 10.3 per cent lower than a year ago. Job ads on the internet eased 1.0 per cent and were down 9.5 per cent on the year. Newspaper ads fell 1.7 per cent, to be down 28.0 per cent on the year.

Chinese trade & inflation data

• Exports from China grew by 12.7 per cent in the year to November after lifting by 5.6 per cent in the year to October. Economists had tipped growth of 7.1 per cent.
• Imports into China grew by 5.3 per cent in the year to November, down from 7.6 per cent growth in the year to October. Economists had tipped growth of 7.2 per cent.
• The trade surplus widened from US$31.1 billion to US$33.8bn, above estimates of US$21.7bn.
• The annual rate of consumer price inflation eased from 3.2 per cent to 3.0 per cent in November, below forecasts for a result near 3.2 per cent. Over the month consumer prices fell by 0.1 per cent – the first fall in six months.
• Food prices fell by 0.2 per cent in November with non-food prices unchanged. Over the year to November, food prices rose by 5.9 per cent while non-food prices were up by 1.6 per cent.
• Food: Prices of fresh vegetables fell by 3.8 per cent in November with pork down 0.5 per cent, meat and poultry prices were flat and egg prices fell by 1.4 per cent. Fruit prices rose 0.5 per cent.
• Producer prices (business inflation) were unchanged for a second straight month in November while industrial prices fell 0.1 per cent. Producer prices in November were 1.4 per cent lower than a year ago after falling at a 1.5 per cent annual pace in October. Economists had tipped a 1.4 per cent annual decline.
• 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.
• 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 10^th of each month. China is Australia’s largest trading partner and changes in the Chinese economic have major implications for the Aussie economy.
• The economic news out of China is encouraging with inflation constrained and export growth lifting. While activity data out tomorrow (retail sales, production and investment) will provide another test, Chinese authorities should be happy with the current economic state of play.
• The sharp lift in petrol prices across a number of capital cities last week, and the recent volatility in prices, will keep consumers wary about spending. Pump prices jumped between 10-12 cents in Sydney, Melbourne, Brisbane and Adelaide in the past week – results that certainly didn’t accord with changes in world oil prices, even adjusted for a weaker Aussie dollar.
• Unfortunately for motorists, oil prices are lifting in line with stronger world economic activity, and pump prices will remain high in the lead up to Christmas. Petrol is the single biggest weekly purchase for most families, so higher prices will make life tougher for retailers.

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.
• 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 10^th 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 economic news out of China is encouraging with inflation constrained and export growth lifting. While activity data out tomorrow (retail sales, production and investment) will provide another test, Chinese authorities should be happy with the current economic state of play.
• The sharp lift in petrol prices across a number of capital cities last week, and the recent volatility in prices, will keep consumers wary about spending. Pump prices jumped between 10-12 cents in Sydney, Melbourne, Brisbane and Adelaide in the past week – results that certainly didn’t accord with changes in world oil prices, even adjusted for a weaker Aussie dollar.
• Unfortunately for motorists, oil prices are lifting in line with stronger world economic activity, and pump prices will remain high in the lead up to Christmas. Petrol is the single biggest weekly purchase for most families, so higher prices will make life tougher for retailers.

What does it all mean?

• It’s clear that the sluggishness in the broader economy is being reflected in the labour market. Businesses are treading water. Trading conditions are holding at the worst levels in four-years and employers are not keen to take on additional staff. However hours worked has lifted by 1.7 per cent over the past year and is now holding at record highs. It seems that employers are working existing staff longer hours.
• While employers are not out there significantly firing workers they are not adding to the workforce. Rather businesses are in a holding pattern, awaiting an improvement in conditions and managing staff hours. A broader view of the labour market data shows that businesses are still more inclined to hire part-time workers and contract staff than take on full-time staff. Part time employment lifted by almost 78,000 workers in the first seven months of 2013 compared with a paltry 11,000 full-time jobs created. The people getting jobs probably prefer full-time work to part-time work, and the loss in income, has had an indirect hit on discretionary retail spending.
• The Reserve Bank is well placed to cut rates again if it deems it is necessary. However the key question facing policymakers is how activity responds after the election is done and dusted. Businesses have been holding back investment plans until the election is out of the way, and if confidence improves then the Reserve Bank can stay on the interest rate sidelines. CommSec expects the labour market to improve over the latter part of 2013, after the election, and as firms get more confident about the outlook for their businesses and about the broader economy. Activity levels across the broader economy are only in the early stages of a recovery, largely driven by the improvement in housing activity – which should support employment over the early part of 2014.
• The Chinese trade accounts recorded a healthy surplus in July. And there was even further good news with a modest improvement in exports as well as imports. The improvement in imports is encouraging, suggesting that Chinese factories have restarted production and require raw materials to keep up with demand. Interestingly given that export growth also picked up, it could be that the build in inventories was to satisfy domestic Chinese demand as well as an improvement in the global economic activity. Only time will tell but the signs are positive.
• Overall the Chinese economy is running at a solid pace and other global economies are still buying Chinese products in healthy quantities. The data is good news for Australian resource producers, because China needs raw materials to churn out the finished goods.

What do the figures show?

Labour force:

• Employment fell by 10,200 in July after rising by a revised to 9,300 jobs created in June (previously reported as a 10,300 rise in jobs).
• In July, Full-time jobs fell by 6,800 in July after falling by 5,100 in June. Part-time jobs fell by 3,400 in July after rising by 14,400 in June. The unemployment rate held steady at 5.7 per cent in July – a four year high. The participation rate fell from 65.3 per cent to 65.1 per cent.
• The number of hours worked rose by 0.5 per cent in July to be up 1.7 per cent over the year to July.
• The annual employment growth rate fell from 1.4 per cent to 1.1 per cent in July. The working age population rose by 26,600 in July after lifting by 25,400 in June. The working age population grew by 1.8 per cent over the past year.
• Unemployment across states and territories: NSW 5.6 per cent (5.4 per cent in June); Victoria 5.7 per cent (5.8 per cent); Queensland 5.9 per cent (6.3 per cent); South Australia 7.1 per cent (6.1 per cent); Western Australia 4.6 per cent (4.6 per cent); Tasmania 8.2 per cent (9.0 per cent); Northern Territory 5.3 per cent (5.2 per cent); ACT 3.6 per cent (3.8 per cent).
• Queensland recorded the biggest job gains in July (up 18,400), followed by Tasmania (up 300). Jobs fell most in South Australia and Victoria (both down by 12,300), followed by NSW (down 7,400) and Western Australia (down 3,500). In trend terms jobs rose by 800 in the Northern Territory and rose by 300 in trend terms in the ACT.

Chinese trade figures:

• The Chinese trade accounts recorded a $17.82 billion surplus (forecast was for a surplus of $26.90 billion) in July. Exports rose 5.1 per cent in the year to July (forecast +2.0 per cent) while imports rose 10.9 per cent (forecast, +1.0 per cent).
• Over the year to July the trade surplus was US$264.7 billion, easing further away from the four-year high of $281.3 billion in the year to February
  • The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel.
    • If more people are employed, then there is greater spending power in the economy. But at the same time companies may adjust the work hours of employees. If employees work less hours, and therefore get paid less, then spending power in the economy is reduced.
    • China’s Customs Office releases trade data around the 10^th of each month. China is the world’s second largest economy and Australia’s largest trading partner. Changes in the Chinese economy have major implications for the global and Aussie economy, exchange rates and interest rates.
    • The focus on part-time employment highlights the pressures being faced by the business sector. Trading conditions and profitability continues to be squeezed. In addition businesses are unlikely to focus on significant investment plans until the election is out of the way and confidence levels improve. As such the Reserve Bank looks set to maintain an easing bias. Although policymakers are likely to keep rates unchanged over the next couple of months while attempting to gauge if activity levels pick up after the election.

What is the importance of the economic data?

• ·The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel.
• If more people are employed, then there is greater spending power in the economy. But at the same time companies may adjust the work hours of employees. If employees work less hours, and therefore get paid less, then spending power in the economy is reduced.
• China’s Customs Office releases trade data around the 10^th of each month. China is the world’s second largest economy and Australia’s largest trading partner. Changes in the Chinese economy have major implications for the global and Aussie economy, exchange rates and interest rates.

What are the implications for interest rates and investors?

• The focus on part-time employment highlights the pressures being faced by the business sector. Trading conditions and profitability continues to be squeezed. In addition businesses are unlikely to focus on significant investment plans until the election is out of the way and confidence levels improve. As such the Reserve Bank looks set to maintain an easing bias. Although policymakers are likely to keep rates unchanged over the next couple of months while attempting to gauge if activity levels pick up after the election.