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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AUD/USD down as unemployment rate in Australia remains unchanged

The Australian dollar fell against U.S. dollar on Thursday after Australia's unemployment rate remained unchanged at 5.8%.

The Australian Bureau of Statistics reported an unemployment rate of seasonally adjusted 5.8% for December, which is the same as in November and as expected. In a release made earlier today, the number of employed people fell by 22,600 during the month.

In Japan, according to the government data released this morning, core machinery orders went up unexpectedly by 9.3% in November from the previous month as demand picked up ahead of an upcoming sales tax hike. Economists had expected an increase of 1.2%.

Also on Thursday, Bank of Japan Governor Haruhiko Kuroda said that the BOJ will maintain its aggressive easing policy until the annual inflation rate is brought to around 2%. Speaking during BOJ branch managers meeting in Tokyo, Kuroda said, "Japan's economy is on steady track toward the 2% price target."

He also said the Japanese economy is expected to continue a moderate recovery, which will be affected by fluctuations in demand before and after the April sales tax hike.

AUD/USD traded down 1.21% at 0.8808 while USD/JPY traded up 0.19% at 104.78.

Meanwhile on Wednesday, the U.S. dollar firmed against the euro and most other major currencies after data revealed that manufacturing activity in the New York State expanded at the fastest pace since May 2012 this month.

The Federal Reserve Bank of New York said that its general business conditions index jumped to 12.51 in January from an upwardly revised 2.22 in December. Analysts were expecting the index to rise to only 3.75.

Elsewhere, U.S. wholesale prices beat expectations and firmed the dollar further.

The U.S. producer price index rose 0.4% in December, the biggest increase since June, recovering from a 0.1% decline in November and was 1.2% higher from a year earlier.

Core PPI was up 0.3% in December and rose 1.4% on a year-over year basis, compared to expectations for a monthly increase of 0.1% and an annual gain of 1.3%.

The solid data convinced investors that the Federal Reserve will continue winding down its USD75 billion in monthly bond purchases in the coming months.

Bond purchases weaken the dollar by driving down long-term interest rates, and talk of their dismantling tends to strengthen the greenback.

Wednesday's economic indicators were the latest convincing investors that the poor December jobs report was likely a hiccup on the road to recovery.

Also giving the dollar support, the Federal Reserve released its Beige Book earlier, which said the U.S. economy continues to expand at a moderate pace.

Meanwhile in Europe, data revealed the euro zone's trade surplus widened to EUR16.0 billion in November from a surplus of EUR14.3 billion in October, largely due to a decline in imports. Analysts had expected the trade surplus to widen to EUR16.7 billion.

Elsewhere, Germany's Federal Statistics Office reported earlier the economy expanded by just 0.4% in 2013 after increasing by 0.7% in 2012, as the crisis in the euro zone acted as a drag on growth. Analysts had been expecting growth of 0.5%.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, remanied unchanged at 81.12.

AUD/USD: Jobs-induced selling damages technicals

AUD/USD is over 1 cent cheaper this Thursday, lowest at 0.8796 with a disconcertingly high number of full time jobs lost in Australia to blame for the new stampede of sellers.

Australian jobs data - ABS

Seasonally adjusted estimates (Dec change): Employment decreased 22,600 to 11,629,500. Full-time employment decreased 31,600 to 8,067,700 and part-time employment increased 9,000 to 3,561,800. Unemployment increased 8,000 (1.1%) to 722,000. The number of unemployed persons looking for full-time work increased 13,300 to 532,400 and the number of unemployed persons looking for part-time work decreased 5,300 to 189,600. The unemployment rate increased 0.1 pts to 5.8%, based on unrounded estimates. The participation rate decreased 0.2 pts to at 64.6%. Aggregate monthly hours worked increased 0.6 million hours to 1,634.0 million hours.

AUD/USD weekly analysis

Since the AUD/USD has penetrated into a fresh 3-year low, one has to refer to the weekly chart to spot the next key support, which comes at 0.8545/50 (50% fib retrac GFC low-all time high). From an ichimoku price theory, the break into new lows activates a new projected long term downside target with minimum target of 0.82. It is also worth noting the huge continuation bearish engulfing bar pattern on the weekly, indicating that the momentum should be on the side of sellers to continue making advances in the short term.

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.

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?”


the source

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