The Australian Bureau of Statistics reported the index for all employees’ hourly pay increased by 0.9% for the September to December 2011 quarter. More specifically, industrial index increases included 0.5% for transportation, postal and warehousing while industries like arts and recreation services rose 1.6%. In terms of annual change, the hourly pay increases went up by 3.7% for all employees.
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Despite the optimistic reports, other indicators suggest Australia’s economy may not wholly deserve a good bill of health. At present, the jobless rate sits low, at 5.1%, but reports coming from the manufacturing sector suggest it will perform major job cuts to align with costs incurred by the raising value of the Australian dollar. Furthermore, banks and retailers have also indicated a need to cut their employment numbers. Additionally, several sectors have already seen decreases in their employment listings. These include job listings in non-mining states such as New South Wales which decreased by 16.4% as well as Victoria lowering 17.1% over 2011.
Additionally, The Australian Chamber of Commerce and Industry indicated small-business-confidence is at a lower low not seen since March 2009. This is not surprising as current business conditions are yielding little profit. Alongside this, Dun and Bradstreet (debt tracker) reported that small business failed at a greater rate (jumping 48.0%) for the 2011 year.
The Aussie Dollar came under pressure today with the sudden resignation of Foreign Minister Kevin Rudd. There are reports in the media that Prime Minister Julia Gillard’s government is in crisis. Rudd said, “The simple truth is that I cannot continue to serve as foreign minister if I do not have Prime Minister Gillard's support.” Gillard said she was disappointed over Rudd’s statement. The AUDUSD broke below its 200 period moving average and is now testing support at 1.0600. We expect the pair to decline to 1.0500 due to the political uncertainty.
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