More signs the economy is slowing: Economic roundup
Wednesday, June 11, 2008/
Employers are feeling the heat of economic uncertainty, with new data from ANZ and Westpac showing a decrease in both employer and consumer confidence.
ANZ says the total number of job advertisements in metropolitan newspapers and the internet dropped in May to a weekly average of 270,751.
While April saw a newspaper advertisement increase of 16.1%, the total number dropped in May to 13.5%, the largest decline in eight years. Advertisements are now 16% lower than this time last year. Internet ads also fell by 0.7% to a weekly average of 253, 554.
Sally Auld, ANZ co-head of Australian economics, says: “We are seeing a loss of momentum in job advertisement growth.” She also says uncertainty about the global economic climate “reflects caution on the part of employers hiring new staff”.
In a further sign the economy is slowing, Westpac says its Consumer Sentiment Index, released today, is at its lowest level since December 1992. The index fell 5.6% from May to June, which, unlike other declines in the index, was not preceded by an announcement of higher mortgage rates.
Westpac’s chief economist Bill Evans says the result is “most surprising”, and “petrol prices are likely to have been the main culprit behind this sharp fall in the index”.
This follows the record growth of US crude last week of $US16 to nearly $US140 a barrel. However, oil closed $US3.04 down to $US131.31 a barrel last night, starting to erase any pressure caused by a massive influx of investors in the oil markets.
Federal Reserve chairman Ben Bernanke says the Fed will continue to “strongly resist” inflation, remarks fuelling speculation the bank will raise interest rates at its September meeting.
The US dollar has gained strength from the claims, which saw the Australian dollar reached a four-week low against the US dollar. The Aussie dollar was at $US0.9461/64 this morning, but dropped to the low of $US0.9441 offshore. At 11.30am, the Aussie dollar was standing at US94.5c.
The sharemarket continued its slide of recent days, falling 0.4% in morning trade. The benchmark S&P/ASX200 index fell 21.4 points to 5416.1, after dropping 2.8% in its largest single-day fall in about three months yesterday.