Since we got a data dump from the Land Down Under this week, it’s time for me to do a quick economic roundup for the country! Here are the latest reports from Australia and their potential effect on long-term forex price action.
Retail sales, which is a primary gauge for consumer spending, came in stronger than expected for the month of September. The report showed a 1.2% gain, higher than the projected 0.3% increase and the previous month’s 0.1% uptick. This marks the report’s most impressive gain in nearly two years, boosted mostly by a surge in iPhone 6 sales.
Economic analysts warned, however, that this surge may have been caused by seasonal factors and might not be sustained later on. Spending on household goods and electronics led the increase, spurred mostly by gift-buying ahead of the December holidays.
On the other hand, the trade balance missed the mark, as the deficit widened to 2.26 billion AUD in September. To top it off, the previous month’s figure was downgraded from a shortfall of 0.79 billion AUD to 1.01 billion AUD.
This means that imports have been outpacing exports for the past months, a sign that external demand is weakening. The recent decline in commodity prices has been blamed for lower export revenues, which could weigh on mining industry profits, while the Australian dollar’s depreciation has received credit for boosting import values.
The latest jobs release was a little more tricky than usual, as labor market statisticians have made some revisions in the employment survey methodology. While the headline employment change figure came in higher than expected at 24.1K versus the estimated 20.3K in hiring gains, the Australian dollar gave up ground to its forex counterparts as the jobless rate ticked up from 6.1% to 6.2%.
A quick review of the previous releases indicates that jobs figures for four out of the past five months have all been downgraded. With that, analysts predicted that RBA Governor Stevens and his men will keep interest rates low for much longer.
Given these data releases, do you think the Australian economy is still feeble? Share your thoughts in our comment box or cast your votes in our poll below!