Tag: ABS

The GDP Per Capita Conundrum

We had the latest national accounts to end of December 2019 this week. The ABS advised that:

The Australian economy grew 0.5 per cent in seasonally adjusted chain volume terms in the December quarter 2019 and 2.2 per cent through the year, according to figures released by the Australian Bureau of Statistics (ABS).

Chief Economist for the ABS, Bruce Hockman, said: “The economy has continued to grow and picked up through the year, however the rate of growth remains below the long run average.”

Domestic demand remained subdued with 0.1 per cent growth in the December quarter. A pick up in household discretionary spending and continued increases in the provision of government services was dampened by falls in dwelling and private business investment.

Falls in dwelling investment continued, declining 3.4 per cent during the quarter, the sixth consecutive fall. This fall was consistent with the decline in construction industry value added, falling 2.3 per cent. The housing market recovery is evident in the increase in ownership transfer costs, rising 12.3 per cent during the quarter to be up 6.5 per cent through the year.

Household income remained steady with compensation of employees recording its twelfth consecutive rise, increasing 1.0 per cent during the quarter. This reflects a rise in the number of wage and salary earners as well as a steady increase in the wage rate. Non-life insurance claims contributed to household income reflecting increased claims attributed to natural disaster occurrences in the quarter. The household saving to income ratio was 3.6 per cent, driven by the subdued consumption coupled with steady increases in wages and a boost in insurance claims.

The Mining industry provided additional strength to the economy, with growth in production volumes of 1.6 per cent, strengthening through the year to 7.3 per cent. This was reflected in the growth in mining exports and inventories.

Falling prices for key export commodities impacted the terms of trade in the December quarter, which fell 5.3 per cent. This reduced nominal GDP, which fell 0.3 per cent, as lower coal, iron ore and gas prices contributed to more subdued company profits. Mining profits declined 2.6 per cent for the quarter.

Real net national disposable income declined 0.9 per cent. “Fluctuations in commodity prices have significant effects on the Australian economy in terms of export revenues and real income,” added Mr Hockman.

But the real question is, does the GDP really tell us anything useful? I discuss the GDP question with American in OZ Salvatore Babones, Associate Professor, University of Sydney.

Dwelling Approvals Moderate in January

The number of dwellings approved rose 0.5 per cent in January, in trend terms, according to data released by the Australian Bureau of Statistics (ABS) today.

The data is weaker than many was expecting, but we suspect that’s a direct impact of slowing of high-rise approvals, especially in Victoria, and perhaps the bushfires. The one-offs we saw at the end of last year, were exactly that.

ABS Director of Construction Statistics, Daniel Rossi, said: “The rise was driven by private sector houses, which rose 0.8 per cent, in trend terms.

“Meanwhile, private sector dwellings excluding houses fell 0.1 per cent. A significant fall in the number of apartments approved in January has offset the strength recorded in late 2019.”

Across the states and territories, dwelling approvals rose in Australian Capital Territory (7.3 per cent), Victoria (2.8 per cent) and Northern Territory (2.7 per cent). Falls were recorded in Tasmania (3.7 per cent), South Australia (3.4 per cent), Western Australia (2.0 per cent), New South Wales (0.8 per cent) and Queensland (0.7 per cent), in trend terms.

Approvals for private sector houses increased in Victoria (2.6 per cent), Western Australia (2.0 per cent), Queensland (0.6 per cent) and South Australia (0.4 per cent). Private house approvals in New South Wales fell 2.1 per cent, in trend terms.

The seasonally adjusted estimate for total dwellings approved fell 15.3 per cent in January, driven by a 35.5 per cent decrease in private dwellings excluding houses. This was largely due to weakness in approvals for apartments (which is volatile from month-to-month), especially in Victoria.

The value of total building approved rose 0.3 per cent in January, in trend terms, after falling for six months. The value of residential building rose 0.1 per cent, while non-residential building increased 0.4 per cent.

Wages rose 0.5% in the December quarter 2019

The seasonally adjusted Wage Price Index (WPI) rose 0.5 per cent in the December quarter 2019 and 2.2 per cent through the year, according to figures released today by the Australian Bureau of Statistics (ABS).

ABS Chief Economist, Bruce Hockman stated “The seasonally adjusted quarterly rise of 0.5 per cent extended the period of moderate growth observed throughout 2019, and was influenced by the relative stability of the labour underutilisation rate. Annually, both private and public sector wages rose 2.2 per cent; this was the lowest public sector growth rate since the commencement of the index in December quarter 1997.”

For the first time since 2012, private sector wages grew at a faster rate than the public sector (0.5 compared to 0.4 per cent), in original terms.

Across industries, annual wage growth in 2019 ranged from 1.6 per cent for the information media and telecommunication services industry to 3.1 per cent for the health care and social assistance industry.

Victoria recorded the highest through the year growth of 2.7 per cent, while Western Australia recorded the lowest for the sixth consecutive quarter (1.7 per cent)

The Black Friday Pull-Through

We look at the latest retail data from the ABS – December was woeful, and there is no evidence of the so called retail bounce.

Australian retail turnover fell 0.5 per cent in December 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.

https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8501.0Dec%202019?OpenDocument

Retail Turnover Falls 0.5 Per Cent In December

Australian retail turnover fell 0.5 per cent in December 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.

This follows a rise of 1.0 per cent in November 2019.

“The December fall comes after a strong November, led by Black Friday sales” said Ben James, Director of Quarterly Economy Wide Surveys. “There were also some effects from bushfires and associated smoke haze apparent in New South Wales data. Specifically, food retailing and cafes, restaurants and takeaway food services were negatively impacted.”

There were falls for department stores (-2.8 per cent), cafes, restaurants and takeaway food services (-0.9 per cent), clothing, footwear and personal accessory retailing (-1.5 per cent), food retailing (-0.3 per cent), and household goods retailing (-0.3 per cent). These falls were partially offset by a rise in other retailing (0.2 per cent).

In seasonally adjusted terms, there were falls in New South Wales (-1.2 per cent), Queensland (-0.5 per cent), South Australia (-1.3 per cent), the Northern Territory (-0.4 per cent), and the Australian Capital Territory (-0.1 per cent). Victoria (0.0 per cent) and Western Australia (0.0 per cent) were relatively unchanged. Tasmania (1.1 per cent) rose in seasonally adjusted terms in December 2019.

The trend estimate for Australian retail turnover rose 0.3 per cent in December 2019, following a 0.3 per cent rise in November 2019. Compared to December 2018, the trend estimate rose 2.8 per cent.

Online retail turnover contributed 6.6 per cent to total retail turnover in original terms in December 2019. In December 2018, online retail turnover contributed 5.6 per cent to total retail.

Trend Unemployment Ends 2019 At 5.1% [Podcast]

We review the latest ABS data.

https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Dec%202019?OpenDocument

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Trend Unemployment Ends 2019 At 5.1% [Podcast]
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Trend Unemployment Rate Ends 2019 At 5.1%

Australia’s trend unemployment rate decreased to 5.1 per cent in December 2019, according to the latest information released by the Australian Bureau of Statistics (ABS) today.

This may be enough to stay the RBA’s hand in February, as the headline rate fell, and the jobs hours worked rose, though there was a disproportionate shift towards part-time work, and the underutilisation rate is also higher. In fact, the fall can be best linked to a falling participation rate as more chose not to work over the summer. So nothing here to really support signs of a stronger economy. Underutilisation among the 15-25’s is above 25%.

Employment and hours

In December 2019, trend monthly employment increased by around 18,000 people. Both full-time and part-time employment increased by around 9,000 people.

Over the past year, trend employment increased by around 261,000 people (2.1 per cent), which continued to be above the average annual growth over the past 20 years (2.0 per cent).

Full-time employment growth (1.5 per cent) was below the average annual growth over the past 20 years (1.6 per cent) and part-time employment growth (3.2 per cent) was above the average annual growth over the past 20 years (3.0 per cent).

“While there has been stronger growth in part-time employment over the past year, the underemployment rate is still where it was last December, at 8.3 per cent,” said Mr Hockman.

The trend monthly hours worked increased by 0.2 per cent in December 2019 and by 1.7 per cent over the past year. This was in line with the 20 year average annual growth of 1.7 per cent.

Underemployment and underutilisation

The trend monthly underemployment rate remained steady at 8.3 per cent in December 2019, unchanged over the past year. The trend monthly underutilisation rate also remained steady at 13.5 per cent in December 2019, an increase of 0.2 percentage points over the past year.

States and territories trend unemployment rate

The monthly trend unemployment rate increased in the Northern Territory, and decreased in Queensland and Tasmania in December 2019. The unemployment rate remained steady in all other states and the Australian Capital Territory.

Over the year, unemployment rates fell in Queensland, Western Australia, Tasmania and the Australian Capital Territory. Unemployment rates increased in all other states and the Northern Territory.

Seasonally adjusted data

The seasonally adjusted unemployment rate decreased by 0.1 percentage points to 5.1 per cent in December 2019, while the underemployment rate remained steady at 8.3 per cent. The seasonally adjusted participation rate remained steady at 66.0 per cent, and the number of people employed increased by around 29,000.

The net movement of employed in both trend and seasonally adjusted terms is underpinned by around 300,000 people entering and leaving employment in the month.