- Australia’s Unemployment Falls to 5.6% Despite Job Losses
Australia’s unemployment rate has fallen to 5.6 per cent, despite the loss of 9,800 jobs, as the proportion of people looking for work tumbled.
However, the exact opposite occurred, with the loss of 9,800 jobs but unemployment falling to 5.6 per cent from an upwardly revised August number of 5.7 per cent.
The fall in unemployment was driven entirely by a drop in the participation rate – the proportion of people in work or actively looking for it – from 64.7 to 64.5 per cent.
Perhaps more concerning than the surprise slump in the proportion of people in the workforce was the composition of the estimated 9,800 jobs lost.
The Bureau of Statistics estimates that 53,000 full-time positions disappeared in September, only partly replaced by 43,200 new part-time jobs.
This continues a longer-term trend that appears to have accelerated over the past year, observed the program manager of the bureau’s Labour and Income Branch, Jacqui Jones.
Shift to Part-Time Work ‘Not a Good Outcome’ For Economy
The shift to part-time job creation and full-time work weakness over recent times was noted by JP Morgan analyst Tom Kennedy in a research note earlier this week.
He said the latest numbers fit with this trend and, while unlikely to force an interest rate cut by the Reserve Bank in the short term, would be raising concern at the central bank.
“You’re not going to see too much volatility in the jobless rate, but you should look at things like underemployment and wage growth,” he told Reuters.
“They are likely to remain elevated in the case of the former and very low in the case of wages. That’s not a good outcome.”
Yesterday, ratings agency Moody’s warned that underemployment was a major cause of rising mortgage repayment arrears, which are at a three-year high nationally and record levels in Western Australia, Tasmania and the Northern Territory.
‘The Numbers Are Rubbish’
However, other analysts doubt the veracity of the numbers, given the problems the ABS has had with its employment data over the past couple of years.
“The numbers are rubbish. No one is going to believe these numbers,” TD Securities head of Asia-Pacific research Annette Beacher told Reuters.
“The massive shifts in full-time/part-time is very easy to discount. It’s the sort of irregularities seen in recent months.”
The bureau’s employment figures are based on a survey of 26,000 households each month, a number which has been reduced due to budget pressures.
The sample is gradually rotated to ensure new households are interviewed and that the survey closely reflects the population’s make-up.
Some economists were warning of volatility in the September data because it was a rotation month, however most of those expected it to skew the number upwards.
“The ABS stated that it has altered the headline figure because the incoming rotation sample for Queensland was ‘considerably different to the rest of the Queensland sample’,” observed Paul Dales from Capital Economics.
“Somewhat unhelpfully, when we phoned the ABS it wouldn’t tell us in which direction it has tweaked the data.
“But, since the state breakdown shows that employment in Queensland fell by 4,100, we’re guessing that the actions of the ABS meant that the fall in employment was smaller than would otherwise have been the case.”
Jacqui Jones from the ABS said the move ensured the quality of the overall data.
“This reduced the influence of 580 households of the 4,600 Queensland sample; or around 2 per cent of the total Labour Force sample of 26,000 households,” she responded in a statement.
“The ABS will review this one Queensland rotation group when October data are collected and analysed next month.”
Increased Demand Paves The Way for Expansion of Africa’s Sugar Industry
Africa, June 2021: A new focus report produced by the Oxford Business Group (OBG), in partnership with the International Sugar Organization (ISO), explores the potential that Africa’s sugar industry holds for growth on the back of an anticipated rise in regional demand. The report was presented to ISO members during the MECAS meeting at the Organization’s 58th Council Session, on June 17th 2021.
Titled “Sugar in Africa”, the report highlights the opportunities for investors to contribute to the industry’s development by helping to bridge infrastructure gaps in segments such as farming and refining and port facilities.
The report considers the benefits that the African Continental Free Trade Area (AfCFTA) could deliver by supporting fair intra-African sugar trade efforts and bringing regulatory frameworks under a common umbrella, which will be key to improving competitiveness.
The increased international focus on ESG standards is another topical issue examined. Here, the report charts the initiatives already under way in Africa supported by green-focused investment with sustainability at their core, which will help to instil confidence in new investors keen to adhere to ESG principles in their decision-making.
In addition, subscribers will find coverage of the impact that Covid-19 had on the industry, with detailed analysis provided of the decrease in both worldwide sugar production and prices, as movement restrictions and social-distancing measures took their toll on operations.
The report shines a spotlight on sugar production in key markets across the continent, noting regional differences in terms of output and assessing individual countries’ roles as net exporters and importers.
It also includes an interview with José Orive, Executive Director, International Sugar Organisation, in which he maps out the particularities of the African sugar industry, while sharing his thoughts on what needs to be done to promote continental trade and sustainable development.
“The region is well advanced in terms of sugar production overall, but several challenges still hinder its full potential,” he said. “It is not enough to just produce sugar; producers must be able to move it to buyers efficiently. When all negotiations related to the AfCFTA have concluded, we expect greater investment across the continent and a clearer regulatory framework.”
Karine Loehman, OBG’s Managing Director for Africa, said that while the challenges faced by Africa’s sugar producers shouldn’t be underestimated, the new report produced with the ISO pointed to an industry primed for growth on the back of anticipated increased consumption across the continent and higher levels of output in sub-Saharan Africa.
“Regional demand for sugar is expected to rise in the coming years, driven up by Africa’s population growth and drawing a line under declines triggered by the Covid-19 pandemic,” she said. “With sub-Saharan Africa’s per capita sugar consumption currently standing at around half of the global average, the opportunities to help meet increasing domestic need by boosting production are considerable.”
The study on Africa’s sugar industry forms part of a series of tailored reports that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.
Global Demand for Investment Gold Plunged by 70% YoY to 161 Metric Tons in Q1 2021
Last year, investors flocked to gold as stock markets crashed on a gloomy economic outlook due to the spread of the COVID-19 pandemic. In the second quarter of 2020, global demand for investment gold surged to over 591 metric tons, the second-highest level since 2016. However, the investors’ demand for gold has dropped significantly this year.
According to data compiled by AksjeBloggen, global demand for investment gold plunged by 70% year-over-year to 161 metric tons in the first quarter of 2021.
The Lowest Quarterly Figures after Record Gold Investments in 2020
In 2016, the global gold demand amounted to 4,309 metric tons, revealed Statista and the World Gold Council data. By the end of 2019, this figure rose to 4,356 metric tons. Investment gold accounted for 30% of that amount. Worldwide gold jewelry demand volumes reached 2,118 metric tons that year. Central banks and technology followed with 648 and 326 metric tons, respectively.
Statistics show the global demand for investment gold surged amid the COVID-19 outbreak, growing by 35% YoY to almost 1,800 metric tons in 2020. Demands for gold used in technology also rose by 17% to 383.4 metric tons, while central banks and other institutions bought 326.2 metric tons of gold in 2020, a 50% plunge in a year.
However, after record gold investments in 2020, the global demand for gold for investment purposes dropped to the lowest quarterly level in years.
The Price of Gold Dropped by 5% Since January
The average gold value tends to increase during a recession, making it an attractive investment in uncertain times. In February 2019, a troy ounce of gold cost $1,320.07, revealed the Statista and World Gold Council data. By the end of that year, the price of gold rose to $1,479.13.
The gold price continued growing throughout 2020, reaching an all-time high of over $2,000 in August. By the end of the year, the precious metal price slipped to $1,864 and then rose to over $1,950 in January 2021.
However, the first quarter of the year brought a negative trend, with the price of gold falling to $1,684 by the end of March. Statistics indicate the price of gold stood at around $1,860 last week, a 5% drop since the beginning of the year.
Gold, Other Safe Haven Assets Plunge Ahead of Fed Rate Hikes
Gold and other safe-haven assets plunged last week as the Federal Reserve signals the possibility of raising interest rates twice in 2023 given the ongoing economic recovery post-COVID-19.
The price of gold dropped by 6.04 percent last week as investors rushed to move their funds out of safe-haven assets including the new gold, cryptocurrency.
The entire crypto space sheds $898 billion in market value to hover around $1.625 trillion last week, down from $2.523 trillion recorded on Wednesday 12, 2021. Its highest market capitalisation till date.
The Federal Reserve raised inflation expectations to 3.4 percent and shifted the year it is expected to increase interest rates from near-zero to 2023 from the previously projected 2024.
The new hawkish stance of the central bank led to capital outflow from safe havens and subsequently boosted dollar attraction.
The United States Dollar gained across the board with the dollar index that tracks its performance against six major currencies, rising by 0.63 percent to 91.103 last week.
However, on Monday morning the gold showed signs of recovery, gaining 0.5 percent to $1,772.34 per ounce following the retreat in U.S. treasury yield that boosted the attraction of non-yielding metal.
Bitcoin, the most dominant cryptocurrency coin, pared losses to $33,245 per coin, up from the $32,658 decline it posted last week.
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