Within this month’s update, we share with you a snapshot of economic occurrences
both nationally and from around the globe.
– United States (US) jobs data starts a correction
– Market rally hard on no news!
– Australia jobs data are mixed
We hope you find this month’s Economic Update as informative as always. If you have
any feedback or would like to discuss any aspect of this report, please contact your
The Big Picture
We ended January on a slight sell-off, arguably because markets ran a little bit too hard at the start of the year. But come February 3rd there was one little number in the US jobs report that caused a stir.
Wage inflation came in at 2.9% – not big in itself, but a little higher than expected. That caused market participants to reprice bond yields and equities dived a little more.
A week later, all was forgiven. When the noise was stripped out of the data, markets rallied hard again. But then they sold off in the last couple of days of the month. The US got a second bite at the inflation cherry with the mid-February CPI read.
Both versions of the index beat by a fraction so market volatility started to fluctuate in normal territory. We had the local ASX 200 minimally overpriced in January, so it was no surprise
that our market didn’t fall as far as Wall Street. And it rebounded sharply!
Our labour force data seemed strong on face value. But full-time jobs growth plummeted, while part-time more than took up the slack. Unemployment is stuck in the mid 5% range.
China produced some stunning trade data. The commodity boom is far from over. China is also moving to ‘do a Putin’ by removing the restrictions on a president serving for an extended period. President Xi looks set to be around for at least another 5 – 10 years. Not bad for now but how will the next generation be introduced? Of course Australia and the UK have no limits on the tenure of a PM.