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Australia Unemployment Rate
Australia posted a seasonally adjusted unemployment rate of 5.8 percent in December, the Australian Bureau of Statistics said on Thursday. That was in line with expectations and unchanged from the November reading. But the Australian economy lost 22,600 jobs last month to 11,629,500 versus expectations for an increase of 10,000 jobs following the addition of 21,000 jobs a month earlier.
AUDUSD M5 : 87 pips price movement by AUD - Employment Change news event :
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Australian unemployment rate analysis
Unemployment has decreased, according to the latest figures. Here is a question: if the unemployment rate drops, is everyone happy?
Suppose that, in a very small country, 380 people are either working or would like to work (this group is the labour force), and suppose 38 of these are unemployed. The unemployment rate is 38 out of 380, or 10%: that is the ratio of the unemployed to the labour force. Here are two scenarios.
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Scenario 1: suppose that 19 of the unemployed instantly obtain jobs. Now the unemployment rate drops to 19 out of 380 or 5%.
Scenario 2: suppose that 20 of the unemployed stop seeking work. This removes them from the labour force. The unemployment rate is now 18 out of 360, or 5%.
In each of these scenarios the unemployment rate drops to exactly the same figure but for opposite reasons. A government spruiking its economic credentials would welcome Scenario 1 but hide from Scenario 2. The above scenarios, along with many economic arguments, make a good case to treat the unemployment rate with caution.
Whereas one can use economics to ask “has the unemployment rate fallen for the right reasons?”, it’s possible to use mathematics to ask “has the unemployment rate fallen at all?”
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Australian Dollar Could Wilt As Reality of Covid Recession Sinks In
The Australian Dollar faces another week of rather scant domestic economic news which is all-too likely to leave the coronavirus in charge of market direction.
Investors can look forward to the minutes of May 5’s monetary policy meeting at the Reserve Bank of Australia but they’ll struggle to add much to the backdrop already in place. The central bank left interest rates on hold at record lows this month, having reduced them sharply in March.
However, the markets already know that all stimulus options remain on the table at the RBA, and that it expects this year’s first half to be extremely bleak. Policy makers may be unconvinced that still-lower rates are going to help much, but the prospect of increases, or indeed any form of monetary tightening, is now a long way in the future. The minutes won’t change this perception when they’re released on Tuesday.
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AUD/USD Outlook Hinges on RBA Meeting, Australia Budget Update
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Key developments coming out of Australia may influence AUD/USD as the update to the federal budget lines up with the Reserve Bank of Australia (RBA) meeting on October 6.
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Australian Dollar Forecast
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The growth-linked Australian Dollar lost some ground despite a rising S&P 500 as the US Dollar received a boost from rising Treasury yields. This dynamic remains important to watch ahead.
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Australian Dollar Outlook: Daily Breakout
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The pro-risk Australian Dollar may extend gains after the record miss in US jobs data, amplifying dovish rhetoric from the Federal Reserve and keeping the Dow Jones and S&P 500 intact.
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Australian Dollar Outlook
The Australian Dollar may struggle despite ongoing optimism from Wall Street as falling bond yields and inflation expectations sap AUD/USD’s appeal. Focus on the Federal Reserve next.
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Australian Dollar Outlook
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The Australian Dollar remains vulnerable in the week ahead, eyeing risks such as a dovish RBA, surging Covid cases and recent crackdowns by Beijing. Might US NFPs offer some relief to AUD/USD?
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