Just today, the Australian Bureau of Statistics released important economic data——
Unemployment rate!
According to the latest data, Australia's unemployment rate fell by 0.1% in September, further increasing the likelihood of the Reserve Bank of Australia (RBA) raising interest rates again in November.
The latest data from the Australian Bureau of Statistics (ABS) shows that the seasonally adjusted unemployment rate dropped to 3.6% in September.
Kate Lamb, head of labor statistics at the Australian Bureau of Statistics, said that the number of unemployed people in Australia has decreased by approximately 20000.
&Quot; The number of employed people has slightly increased, increasing by about 7000 people, and the number of unemployed people has decreased by about 20000. In September, the unemployment rate dropped to 3.6%; Lamb said. It is important to remember that a decrease in unemployment does not necessarily mean a significant increase in employment
&Quot; The decrease in unemployment rate in September mainly reflects a higher proportion of people transitioning from being unemployed to no longer being counted as labor force;.
The news of today's drop in unemployment rate has further increased the pressure on the Bank of Australia. The official cash rate target for Australia is 4.10%, and the Bank of Australia has not raised interest rates for four consecutive months.
Diana Mousina, Deputy Chief Economist at AMP Australia, stated that,
The risk of raising interest rates in November is very high;.
Today's data confirms that raising interest rates next month is inevitable
Australia will raise interest rates at least once in the future,
And keep interest rates high.
&Quot; Today's data is mixed, which means that the September quarter inflation data for next week will receive more attention ahead of the Bank of Australia's November board meeting; Mousina said.
&Quot; Based on monthly data and the rise in commodity prices (despite the unexpected downward trend in New Zealand's data and a certain correlation between trade inflation in Australia and New Zealand), as well as more hawkish sentiment in the minutes of the Bank of Australia's October board meeting and Governor Bullocks' comments this week, the risk of an unexpected upward trend in inflation means that the risk of a rate hike in November is high
&Quot; We believe that raising interest rates again would be a policy mistake, as the economy has not yet fully felt the full impact of the rate hike, which will put Australia at risk of an economic recession in 2024. &Quot;
On the job market; Turning Point" Worry about it!
In the minutes of the recent meeting, members of the Reserve Bank's board of directors pointed out that the job market has reached a point where; Turning point", Because the supply of workers has increased, while demand has slowed down.
The meeting minutes read:" The underemployment rate has slightly increased significantly, as have the youth and medium-term unemployment rates
&Quot; In recent months, the hourly unemployment rate and underemployment rate have both rebounded from their lows at the end of 2022;.
Due to frequent interest rate hikes by the central bank, which has raised interest rates by 4% since May last year, the central bank expects the economy to slow down, with the unemployment rate rising to 3.9% by the end of the year and 4.5% by mid-2025.
Sean Langcake, an Australian macroeconomic forecaster at Oxford Economics, said that the latest data indicates that Australia's job market is facing a turning point.
He said:" We have not yet seen the unemployment rate continue to rise. Nevertheless, demand is cooling down, with the number of working hours continuing to decline in September and job vacancies also decreasing
&Quot; Today's data may not have an impact on either party. There are signs that the labor market is slowing down, but this is a slow process and the market is still very tense& Quot; The CPI data to be released next week will be the key data before the November meeting;.
Not reaching" Warning Line"?
But inflation will be the key.
David Bassanese, Chief Economist of Betashares, stated that the September report did not show any" Warning Line", To prove the rationality of raising interest rates next month.
He said:" Nevertheless, the risk of the RBA's decision to raise interest rates in November cannot be ignored due to the upward inflationary risks brought about by the rise in housing prices and the rebound in oil prices. As pointed out in the minutes of the Bank of Australia's October policy meeting, the board has a low tolerance for the speed at which inflation returns to expected values below current expectations
&Quot; Next month, the Bank of Australia will have important new information on inflation and require it to release its latest inflation forecast a few days after the policy meeting
As soon as the news of the decrease in unemployment rate comes out today,
The AUD/RMB exchange rate fell in response:
Within 12 hours, complete from 1:4.671:
Falling below 4.6!
A drop of up to 1%!
At the last moment, there was almost another straight decline.
Directly hit the lowest point in recent times!
Within one day, there was also a noticeable decline:
Data within a month,
The Australian dollar continues to fluctuate against the Chinese yuan:
Please remember not to miss the last wave of Chinese who did not receive any money.
Now at the edge of 4.6, you can try at least one wave!
The latest news hotspots between China and Australia,
Australians may be hit again by interest rate hikes
According to Australian media reports, unless inflation alleviates,
Otherwise, Australians may be hit again by interest rate hikes as soon as two weeks later.
The minutes of the Federal Reserve of Australia's cash interest rate meeting earlier this month showed that the Federal Reserve of Australia is hesitant between maintaining interest rates unchanged and raising them by 0.25%.
Although the board of directors under the leadership of newly appointed President Michele Bullock ultimately decided to adopt the former, this was done considering that quarterly inflation data will be released this month and will play an important role in interest rate decisions in November.
The recently released minutes of the Federal Reserve of Australia meeting stated that "members have observed that before the November meeting, they will receive more data on economic activity, inflation, and the labor market, as well as a series of revised employee forecasts.
When making the decision, the committee members pointed out that if inflation continues more than expected, further tightening of policies may be necessary
Although the inflation rate has significantly decreased since reaching its peak of 8.4% in December, data from last month showed an unexpected increase in August, rising from 4.9% to 5.2%.
Most of this is driven by rising oil prices - as pointed out by the Bank of Australia.
The report states: "In the past few months, the rise in energy prices has led to an increase in overall inflation rates in many countries, including Australia
The members discussed the recent rise in oil prices, which has increased by nearly 30% compared to the end of June, and the price of refined fuels has increased even more
These observations were made before the outbreak of war between Israel and Hamas triggered significant fluctuations in fuel prices.
30% of households go bankrupt within 6 months
The Reserve Bank of Australia has stated that an increasing number of borrowers are on the brink of financial pressure.
As inflation and rising interest rates continue to put pressure on the global economy, Australian households and businesses are vulnerable to financial risks.
As interest rates rise, more and more Australian households are also seeking financial advice, with a small number of borrowers either at the forefront of financial pressure or in the early stages of financial pressure, but this proportion is constantly increasing.
The latest financial stability assessment report released by the Reserve Bank on Friday shows that in July 2023, the proportion of basic fees and mortgage costs for homeowners holding floating rate mortgages exceeding their income is estimated to be about 5%
The report states that these households may not have much ability to cut expenses, with 30% of households facing the risk of depleting their savings within six months, resulting in a higher risk of defaulting on housing loans.
According to the report, the service demand of the treasury bond hotline has also increased by about a quarter compared with the low level during the COVID-19 pandemic.
However, it stated that only a very small number of borrowers are in a negative asset state (i.e. the loan value exceeds the property value), and banks are not too concerned at this stage.
The report states: "Although budget pressures have led to an increase in delinquencies and personal bankruptcies, the vast majority of households are still repaying their debts." The review of the Australian financial system is updated every six months.
Undoubtedly, this period will definitely be a bit difficult. I hope everyone can stabilize their mentality, after all, the bottom may be passing
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