Episode Details

Kia ora,

Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.

I'm David Chaston and this is the international edition from Interest.co.nz.

Today we lead with news the slowing Chinese economy is keeping the oil price low, and it might stay that way because supply is rising, and quite quickly.

But first, although there were no surprises in US initial jobless claim levels, they did rise last week to 229,000 on seasonal factors so there are now 1.65 mln people on these benefits, maintaining the low recent levels. No labour market stress signs yet still.

But there are signs of lingering inflation pressures in their producer prices for October with them up +2.3%, a rise from the +1.9% year on year rate in September. The October rise was slightly more than analysts were expecting. Higher prices in their booming logistics sector caused the twist higher.

The August improvement in EU industrial production was not maintained in September and it ended down-2.0% from the same month a year ago.

But despite that disappointment, Q3-2024 EU GDP came in +0.9% higher than the same quarter a year ago, and employment was up +1.0%. These are the expected levels, so no surprises here. While these levels are low and benchmark poorly with other major economies, there are still positive.

The Australian labour market update for October shows employment rising by +16,000 when a +25,000 rise was expected. Their participation rate slipped slightly, allowing their jobless rate to hold at 4.1%. But this also means their employed workforce is +387,000 higher than a year ago, a healthy +2.7% rise. But almost 40% of that rise was for part-time work; a year ago part-time jobs made up only 31%, so the shift away from full-time positions is rising.

And staying in Australia, their largest bank has concluded that the 2024 "stage 3 tax cuts" are not flowing through to more consumer spending, rather being used to build resilience (or build back some capacity) by paying debt down faster, especially mortgages.

Container shipping freight rates were virtually unchanged last week, 2.4 times higher than a year ao, and 140% higher than pre-pandemic levels in early November.

Bulk cargo rates rose +13% last week from the week before in a sharpish move up, to be almost the same as the same week a year ago.

The UST 10yr yield is now at just on 4.40% and down -5 bps from yesterday.

And we should probably note that the share price for Xero hit AU$171 yesterday, a record high.

The price of gold will start today at US$2574/oz and down -US$15 from this time yesterday.

Oil prices are +50 USc firmer at US$68.50/bbl in the US while the international Brent price is now just under US$72.50/bbl.

In its November upd