Browsing articles in "Banking"
Monday 8th August 2016 - 7:27 pm
Comments Off on Job ads “ease”

Job ads “ease”

by Alan Thornhill

Job advertising fell last month, according to research the ANZ bank published today.

 

The bank said job ads fell by 0.8 per cent in July.

 

It said this was the first decline since April and may reflect heightened uncertainty temporarily delaying the hiring plans of some employers.

 

It added that the annual growth in job ads has slowed to 6.9 per cent from 8.0 per cent  the previous month.

 

 

The bank said too, that the fall in July was driven by both internet and newspaper job ads.

 

Internet job advertisements, which are the main driver of total job ads, declined by 0.7 per cent in July, the bank noted.

 

It said that annual growth in internet jobs ads had slowed from 8.8 per cent  in June to 7.9 per cent in July.

 

The more volatile newspaper ads remain on a structural downward trend and fell further in July, down 12.6 per cent  in the month to be 41.7 per cent  lower than a year ago.

 

The bank’s head of Australian Economics, Felicity Emmett, said:  “the labour market has lost some momentum so far in 2016.”

 

She said there had been :  “slower average growth in both employment and job ads seeing the unemployment rate stabilise around 5.75 per cent.

 

The labour market has lost some momentum so far in 2016, with slower average growth in both employment and job ads seeing the unemployment rate stabilise around 5.75 per cent, in the second half of last year from a peak of 6.3 per cent.”

 

Ms Emmett said, too, that: “more recently, job ads rebounded strongly in May, followed by a modest rise in June.”

 

But she also noted that:  “…these increases have been partly unwound by the decline in July.

 

“Given that ads fell sharply in early July, we think this decline may partly reflect the impact of increased uncertainty following the close federal election on 2 July and the shock decision by the UK to leave the European Union on 24 June,” she said.

 

This impact appears to have been short-lived,

 

Job advertising fell las month, according to research the ANZ bank published today.

 

Ms Emmett also said:  “the labour market has lost some momentum so far in 2016.”

 

Ms Emmett said, too, that: “… job ads rebounded strongly in May, followed by a modest rise in June.”

 

But she also noted that:  “…these increases have been partly unwound by the decline in July.

 

“Given that ads fell sharply in early July, we think this decline may partly reflect the impact of increased uncertainty following the close federal election on 2 July and the shock decision by the UK to leave the European Union on 24 June,” she said.

 

This impact appears to have been short-lived,” Ms Emmett added.

 

 

With surveyed business conditions remaining upbeat and the RBA cutting rates in August, we look for a gradual improvement in hiring intentions over the remainder of the year,” Ms Emmett said.

 

 

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Thursday 4th August 2016 - 7:29 pm
Comments Off on PM hauls banks before parliament

PM hauls banks before parliament

by Alan Thornhill

The Federal government will haul Australia’s banks before a powerful parliamentary committee as it seeks to persuade them to pass on the Reserve Bank’s latest interest rate cut in full.

 

The Prime Minister, Malcolm Turnbull and his Treasurer, Scott Morrison, made the announcement in a joint statement today.

 

Labor might well have gone further.

 

It promised a royal commission into the behavior of  Australia’s banks, before last month’s Federal elections.

 

Mr Turnbull said that in  challenging economic times globally, it is important that Australians retain faith in our financial institutions and the decisions they are taking.

 

“The Australian economy depends critically on the performance and strength of our banking and financial system,” Mr Turnbull said.

 

” Banks operate under a social licence and have responsibilities to the Australian public.”

 

He said they would be asked, particularly about several matters.when they appear before the House of Representatives Economics Committee.

 

In particular the banks would be required to explain:

  • International economic and financial market developments and how these are affecting Australia
  • Developments in prudential regulation, including capital requirements, and how these are affecting the policies of Australian banks
  • The costs of funds, impacts on margins and the basis for bank interest rate pricing decisions
  • How individual banks and the banking industry as a whole are responding to issues previously raised in Parliamentary inquiries through their package of reforms announced in April 2016
  • Bank perspectives on the performance of the Australian economy, including strengths and risks.

 

The appearance by the banks will ensure they have the important opportunity to transparently account for their decision making and how they balance the needs of borrowers, savers, shareholders and the wider community, Mr Turnbull said.

 

The initial response from Australia’s banks was cautious.

 

Andrew Thorburn, the National Australia Bank’s Chief Executive Officer, said for example that his bank is looking  forward to the dialogue around “how we balance”  the needs of different  stakeholders.

 

He said it is also anticipating “outlining the full cost of being an unquestionably strong bank and bringing further insight to the topic of how we set our interest rates.

 

“I am proud to be a banker,” he added.

 

” It has always required carefully thought through decisions,” he added.

 

“But the focus has been on serving the many people who rely on us to get these decisions right. ”

 

 

Thursday 4th August 2016 - 12:57 pm
Comments Off on Retail sales rise – slightly – in June

Retail sales rise – slightly – in June

by Alan Thornhill

Retail sales rose 0.1 per cent in June on seasonally adjusted figures  the Bureau of Statistics published today.

 

The Bureau said   this followed a rise of 0.2 per cent in May 2016.

It said that in seasonally adjusted terms, there were rises in clothing, footwear and personal accessory retailing (3.5 per cent), household goods retailing (0.3 per cent) and department stores (0.7 per cent).

 

But there were falls in food retailing (-0.6 per cent), cafes, restaurants and takeaway food services (-0.1 per cent) and other retailing (-0.1 per cent) in June 2016.
In seasonally adjusted terms, retail sales rose in Queensland (1.1 per cent) and Western Australia (0.1 per cent).

 

Turnover in South Australia was relatively unchanged (0.0 per cent).

 

And there were falls in New South Wales (-0.2 per cent), Victoria (-0.1 per cent), the Australian Capital Territory (-0.6 per cent), the Northern Territory (-1.1 per cent) and Tasmania (-0.2 per cent).

 

The Bureau also said that the trend estimate for Australian retail turnover rose 0.2 per cent in June following a 0.2 per cent rise in May 2016.

 

Compared to June 2015 the trend estimate rose 3.1 per cent.

 

 

Online retail turnover contributed 3.4 per cent to total retail turnover in original terms.

 

In seasonally adjusted volume terms, turnover rose 0.4 per cent in the June quarter 2016, following a rise of 0.5 per cent in the March quarter 2016.

 

The largest contributor to the rise was “other retailing,”  which rose 1.9 per cent in seasonally adjusted volume terms in the June quarter 2016.

Wednesday 3rd August 2016 - 9:47 pm
Comments Off on PM confronts banks

PM confronts banks

by Alan Thornhill

Malcolm Turnbull directly challenged Australia’s big banks today, saying they should pass on the rate cut the Reserve Bank announced earlier this week in full, or explain why.

 

So far the banks have been passing on about half of the 0.25 per centage point cut.

 

That has left families with $300,000 mortgages some $20 a month out of pocket.

 

The Prime Minister said Australia had needed a period of economic transition after its huge mining construction boom.

 

“That’s why we have the big trade export deals, the big deals, the big free trade deals,” he said.

 

However the shadow Treasurer, Chris Bowen disagreed.

 

He said the government was simply “chest beating” on the rate cut.

 

So, this is a Government which is being exposed for a lack of economic leadership, for a lack of economic plan,” Mr Bowen said.

 

He said the government had no plan to increase investment in the non-mining sector, to ensure that we have jobs for the future. “

 

Malcolm Turnbull and Scott Morrison are simply not up to the job,” Mr Bowen said.

Wednesday 3rd August 2016 - 1:59 pm
Comments Off on How we spend our time – and money

How we spend our time – and money

by Alan Thornhill

Hard working Australians, who leave themselves little time to shop, are buying more of their food and groceries online.

 

The National Australia Bank, which watches these trends, says we spent more than $20 billion, making online purchases over the past year.

 

And the strongest growth, seen in that time, was among those aged 35 to 44.

 

That is people of prime working age.

 

Their spending on groceries and liquor rose by 20,5 per cent over the past year.

 

They also spent 19.2 per cent more on homewares and appliances.

 

Meanwhile 18-24 year olds spent 22 per cent more on fashion and 19.9 per cent more on media.

 

The bank said that while overall growth in online spending was still quite strong, it had flattened from that seen back in 2011 when the index was first established.

 

The bank’s Chief Econmomist, Alan Oster, said  “the $20.1 billion spent online by Australians in the last year is equivalent to 6.8 per per cent of spending in the bricks and mortar’ retail sector.

 

“And growth by online businesses is far outpacing these traditional retailers,” he added.s

Tuesday 2nd August 2016 - 6:04 pm
Comments Off on Glenn Stevens’ risks

Glenn Stevens’ risks

by Alan Thornhill

Analysis

 

By Alan Thornhill

 

Twice this year, Glenn Stevens has done something that central bankers don’t like doing.

 

That is cutting interest rates to previously unprecedented levels

 

That happened first in May.

 

Then – again – from Wednesday.

 

Both time rates were cut by 25 basis points

 

The reason Reserve bank chiefs, like Glenn Steven, don’t like taking this step is  simple.

 

But not, necessarily, obvious.

 

After all,  young home buyers will generally welcome the relief they will get in their home loan repayments, when their banks pass, at least some of the benefit they receive on to them.

 

If that’s all there was to it, Mr Stevens would, undoubtedly be among the most popular men in the country right now.

 

But although he is, by all accounts, is a fine fellow, things aren’t as simple as that.

 

What  about those probably somewhat older people, we might call the Savers, who have been relying on a little interest income, perhaps through their superannuation accounts, to help them pay their grocery bills  in retirement.

 

There is another thing, too, that can keep central bankers awake at night, when interest  rates fall to unprecedented levels, on their watch.

 

That’s walking down a dark path, on a moonless night.

 

Who knows what might go wrong?

Tuesday 2nd August 2016 - 4:17 pm
Comments Off on Rates hit new low

Rates hit new low

by Alan Thornhill

The Reserve Bank today cut its cash rate by 25 basis points, to its lowest level ever, just 1.5 cent.

 

Explaining the decision, the bank’s Governor, Glenn Stevens said: “the global economy is continuing to grow, at a lower than average pace.

 

“Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies.

 

“Actions by Chinese policymakers are supporting the near-term growth outlook, but the underlying pace of China’s growth appears to be moderating, “ Mr Stevens said.

 

He noted that: “commodity prices are above recent lows.”

 

However he added: “…this follows very substantial declines over the past couple of years.

 

“Australia’s terms of trade remain much lower than they had been in recent years.

 

“Financial markets have continued to function effectively.

 

Mr Stevens said: ” Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.

 

“In Australia, recent data suggests that overall growth is continuing at a moderate pace, despite a very large decline in business investment,” he added.

 

“Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend.

 

“Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term.

 

“Recent data confirm that inflation remains quite low.

 

“Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.

 

 

“Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time,” Mr Stevens said.

 

 

The Bureau of Statistics reported that Australia’s inflation rate, on the Consumer Price Index, stood at just 1 per cent in the 12 months to the end of June.

 

That is well below the bank’s target range – of 2 to 3 per cent inflation – over the course  of a business cycle.

Tuesday 2nd August 2016 - 1:17 pm
Comments Off on Housing;the market now

Housing;the market now

by Alan Thornhill

Australia’s housing markets – and its economy – presented distinctly mixed pictures today, as member of the Reserve Bank board met to review interest rates.

 

Some economists expect the board to cut the bank’s marker interest rates by another 25 basis points today, taking it to a new low point of 1.5 per cent.

 

However, the late advice they received today, shows that their choice will not be easy.

 

The Housing Industry Association, for example, reported that new home sales had bounced back in June.

 

It’s Chief Economist, Dr Harley Dale conceded that“The overall trend, reflected in a report his association published today “is still one of modest decline for New Home Sales.

 

However he added that “…a bounce of 8.2 per cent in June 2016 highlights the resilience of the national new home building sector.”

 

“The overall profile of HIA New Home Sales is signalling an orderly correction to national new home construction in the short term, as are other leading housing indicators,” Dr Dale said.

 

Meanwhile Corelogic, which studies property prices and rents, reported that while capital city dwelling values had reached a record high in July, rental yields had slipped to a record low.

 

The firm’s research head, Tim Lawless, said:  “the recent moderation in the rate of capital gains should be viewed as a positive sign that growth in dwelling values may be returning to more sustainable levels.

“However, the growth trend rate is still tracking considerably faster than income growth resulting in a deterioration of housing affordability.”  He added.

 

 

HIA New Home Sales bounce back in June.

 

The HIA New Home Sales Report, a survey of Australia’s largest volume builders, shows that total new home sales ended 2015/16 on a higher note, said the Housing Industry Association – the voice of Australia’s residential building industry.

 

“The overall trend is still one of modest decline for New Home Sales, but a bounce of 8.2 per cent in June 2016 highlights the resilience of the national new home building sector,” commented HIA Chief Economist, Dr Harley Dale.

“The overall profile of HIA New Home Sales is signaling an orderly correction to national new home construction in the short term, as are other leading housing indicators,” he noted Harley Dale.

 

“Below the national surface, the large geographical divergences between state housing markets have been a prominent feature of the current cycle – that will continue.

The New Home Sales series highlights this fact.

 

Comparing the June quarter this year to the same period last year, detached house sales are down very sharply in South Australia (-21.4 per cent) and in Western Australia (-27.5 per cent), yet sales are up by 17.0 per cent in Victoria and by 7.1 per cent in Queensland. New South Wales rounds off the detached house coverage provided by the New Home Sales report and sales are down by 7.3 per cent on an annual basis.”

 

The sale of detached houses bounced back by 7.2 per cent in the month of June 2016. ‘

 

Multi-unit’ sales continued their recent recovery, growing by 11.5 per cent after a lift of 4.9 per cent in May. In the month of June 2016 detached house sales increased in all five mainland states with the largest increases occurring in Queensland (+14.9 per cent) and WA (+9.1 per cent).

 

Detached house sales increased by 7.5 per cent in NSW, 3.7 per cent in South Australia, and 2.2 per cent in Victoria.

 

Business confidence seems set to improve,

 

The latest Dun and Bradstreet business expectations survey, which was also published today, showed that Business expectations for sales, profits and employment have all bounced back for the three-month period to 31 December 2016.

 

The firm said this is  surprising, in view of the British vote to leave the European Union.

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Alan Thornhill is a parliamentary press gallery journalist.
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