Weekly Market Recap
Australia
18/05/2020
Week in review
- Westpac consumer confidence up at 88.1
- NAB business confidence up to -45.7
- Australia unemployment rate rises to 6.2%
Week ahead
- Australia retail sales
- European and U.S. PMI surveys
- RBA meeting minutes
Thought of the week
The 1 percentage point rise in the unemployment rate to 6.2% is not great in any scenario but at face value was better than expected. The sharp fall in the participation rate played a part in keeping the unemployment rate low. If an unemployed worker is not looking for a job then they are not counted towards the unemployment rate. It is pretty hard to find a job when everything is closed. Hours worked is becoming a focus as staff on the JobKeeper scheme are counted as employed but work zero hours. Hours worked declined by 8% year-over-year in April, a much bigger drop than in the number of employed. The unemployment rate will continue to rise in the coming months as its likely that workers return to the labour force faster than new jobs are created or old jobs again become available.
Fewer jobs but much fewer hours
Year-on-year change
Source: ABS, FactSet, J.P. Morgan Asset Management, all returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.
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