Monthly CPI falls with energy subsidies
According to ABS, Australian monthly inflation dropped from 3.5% in July to 2.7% in August.
The largest price increases were seen in 3.4% in food and non-alcoholic beverages and 2.6% in housing. These were somewhat balanced by a 1.1% decrease in transportation costs.
Much of the fall was driven by government energy rebates, which are artificially and temporarily suppressing the headline CPI measure.
Trimmed Mean Inflation (TMI) – which offers a better reading of underlying inflation – was 3.4% in August, showing that inflation still remains above the target band of 2-3%
Vacancies decrease yet still high
In August 2024, there were 329,900 job vacancies. Although the number of vacancies has decreased over the past two year, it is still twice as high as it was before the pandemic, with 2.2% of all jobs in Australia currently unfilled.
Australia has 627,000 unemployed individuals, resulting in approximately 1.9 unemployed people per job vacancy. This remains significantly tighter than the normal the ratio of around 4.0.
The sectors with the highest vacancy rates are mining (3.5%), utilities (3.1%), and accommodation and food services (3.7%). Vacancy rates in wholesale trade, ICT, financial services and administrative services have returned to pre-pandemic levels.
Private sector job creation fails
Job creation in the private sector failed dramatically in August with the slowing economy, with the public sector compensating.
In the quarter to August 2024, the private sector shed 516,000 jobs in net terms. This is equivalent to 4.4% of private sector jobs, and is the most dramatic fall since the pandemic.
Public sector employment surged in its place, adding 499,000 new jobs– a 19.4% increase to the government workforce in a single quarter! As a result, the economy only shed 17,200 jobs overall.
However, the dramatic collapse in private sector employment points to growing weakness in the Australian labour market and business conditions more broadly.
Non-food industries boosted retail in August
Retail turnover increased by 3.1% from the previous year in August, while the monthly retail turnover remained mostly stable.
In non-food sectors, department stores saw the biggest rise in sales with a 1.6% increase. Household goods sales dropped the most by 0.3%, while sales in the food industry remained unchanged.
Warmer-than-usual weather in August boosted the spending on outdoor items such as camping gears, outdoor dining, hardware and gardening equipment.
Net migration drove population growth
Australia’s net overseas migration (NOM) was 509,800 in March 2024 down from a peak of 559,900 in September 2023.
The Australian population reached 27.1m by
31 March 2024, boosted by a significant increase of 615,300 people over the past year.
Net overseas migration accounted for 83% of this growth, while the remaining 17% was natural increase from births and deaths.
Australia’s net overseas migration levels have begun to slow from their post-pandemic highs as tighter restrictions on inward migration stanches the flow of new migrant.
Construction work done flat in Q2
In the June 2024 quarter, total construction work increased by 1.2% compared to the previous year.
The engineering sector grew 4.8% y/y for the June quarter, while the residential building completion decreased 2.9%.
Despite positive market demand, the house building sector has remained relatively flat in overall trend terms. Factors contributing to this stagnation include supply chain disruptions, rising material costs, labour shortages and regulatory hurdles during permit approval processes.
