Aussie labour market shrinks

<p>Kia ora,</p><p>Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news the Australian labour market is now shedding jobs in an unexpected development.</p><p>But first, <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20230324.pdf" target="_blank"><strong>US jobless claims</strong></a> came in almost exactly as expected at +255,000 last week so there are now 1.95 mln people currently on these benefits. This 'canary' metric isn't yet showing the expected labour market shift to tougher conditions.</p><p>However, American <a href="https://www.bls.gov/news.release/ppi.nr0.htm" target="_blank"><strong>producer prices rose</strong></a> in January by +6.0% from a year ago, which was a lesser rate than in December but not the pullback markets were expecting. The annualised rate between December and January was at a more than +8% rate however and the most in seven months, so inflation isn't beaten in this data and it maintains pressure on the Fed. Equity markets fell after this data. Bond yields rose.</p><p>And that is despite a very weak <a href="https://www.philadelphiafed.org/-/media/frbp/assets/surveys-and-data/mbos/2023/bos0223.pdf" target="_blank"><strong>factory survey</strong></a> from the Philly Fed's heartland manufacturing area. It was an unexpectedly sharp and deep retreat with weaker new order levels.</p><p><a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf" target="_blank"><strong>American housing starts fell</strong></a> in January from year ago levels and from prior month levels to a 31 month low, but new building consent levels were unchanged from the prior month even if they too are down steeply from a year ago. Both metrics were pretty much in line with what was expected however.</p><p><a href="http://www.stats.gov.cn/tjsj/zxfb/202302/t20230216_1908096.html" target="_blank"><strong>Off