Australian economy facing a soft patch
Australia's economy appears to be facing a soft patch as indicated by the unchanged unemployment rate for May, which stayed at a two-year low of 4.9 per cent. Although in line with expectations and unchanged from April, what disappointed most and sent the Aussie dollar lower was that only 7,800 jobs were added in May, well below the 20,000 expected. Full-time jobs dropped substantially while the number of part-time jobs rose. If the trend of more part-time jobs at the expense of full-time jobs continues it does not bode well for the overall economy. It also pushes the likelihood of an interest rate increase further down the line. A weaker growth outlook appears to have also been vindicated by the Reserve Bank of Australia's decision to leave its key rates unchanged. Of particular interest is the development in Chinese trade during May. China is Australia’s main trading partner, and the status of Chinese imports will be closely watched.
Australia's economy appears to be facing a soft patch as indicated by the unchanged unemployment rate for May, which stayed at a two-year low of 4.9 per cent. Although in line with expectations and unchanged from April, what disappointed most and sent the Aussie dollar lower was that only 7,800 jobs were added in May, well below the 20,000 expected. Full-time jobs dropped substantially while the number of part-time jobs rose. If the trend of more part-time jobs at the expense of full-time jobs continues it does not bode well for the overall economy. It also pushes the likelihood of an interest rate increase further down the line. A weaker growth outlook appears to have also been vindicated by the Reserve Bank of Australia's decision to leave its key rates unchanged. Of particular interest is the development in Chinese trade during May. China is Australia’s main trading partner, and the status of Chinese imports will be closely watched.
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