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AUSTRALIA ECONOMY: UNEMPLOYMENT UP, TRADE DEFICIT WIDER

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AUSTRALIA ECONOMY: UNEMPLOYMENT UP, TRADE DEFICIT WIDER

Nov 4 2014, 10.45am GMT

Stock.com

As imports grow ever larger and exports wane, Australia’s trade deficit reaches its widest in two years.

The trade balance reported on 4 Nov, 11:30am (CANBERRA TIME), painted a dim picture for the Australian economy with trade balance figures: Actual -2.26B, forecast -1.78B, previous -1.01B.

Interestingly, the focus of the credit and debit lists was non-monetary gold, a commodity that has seen huge losses this year and is now down to mid-2011 prices. In Australia gold exports rose $585m (60%), whilst imports rose $135m (59%). Total imports for Australia rose 6 percent from the prior month, while exports rose just 1 per cent.

Australian Bureau of Statistics figures

BALANCE ON GOODS AND SERVICES

  • In trend terms, the balance on goods and services was a deficit of $1,850m in September 2014, an increase of $50m (3%) on the deficit in August 2014.
  • In seasonally adjusted terms, the balance on goods and services was a deficit of $2,261m in September 2014, an increase of $1,248m (123%) on the deficit in August 2014.

CREDITS (EXPORTS OF GOODS AND SERVICES)

In seasonally adjusted terms, goods and services credits rose $269m (1%) to $26,457m. Non-monetary gold rose $585m (60%), rural goods rose $74m (2%) and net exports of goods under merchanting rose $2m (25%). Non-rural goods fell $443m (3%). Services credits rose $51m (1%).

DEBITS (IMPORTS OF GOODS AND SERVICES)

In seasonally adjusted terms, goods and services debits rose $1,517m (6%) to $28,718m. Intermediate and other merchandise goods rose $974m (11%), consumption goods rose $186m (3%), capital goods rose $178m (3%) and non-monetary gold rose $135m (59%). Services debits rose $43m (1%).

Meanwhile, the unemployment figures were released by the Australian Bureau of Statistics, reporting a fall in employment: total number of Australians employed in September was 24,400, below previous reports with the jobless rate at 6.2 percent, compared with August’s 6.1 percent.

However, a welcome supportive measure for the AUD came in the dovish statement in the RBA monetary policy announcement where the benchmark lending rate stayed at 2.5 percent in the hope that inflation remains at 2 to 3 percent.

Though whilst the policy makers try to hold interest rates, additional data on monthly Retail Sales also came in, up 1.2%, forecast at 0.3%, previous 0.1%.

AUD/USD promptly rose by more than 1.0 percent, from 0.865 up to 0.875.

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