In further signs the labour market gradually continues to soften, jobs data released on Thursday revealed WA’s unemployment rate edged upwards to now sit at 4.2% for January, up from 3.9% in December.
This is slightly above the national average, with Australia’s unemployment rate hitting 4.1%. This result should give the Reserve Bank further confidence that the current monetary policy setting is having the intended effect on economic activity.
Retail trade in sharp decline
Retail trade data released last week showed a sharp decline in WA’s retail turnover, falling 3.8% over the month to December.
This is on the back of a pickup in spending the previous month as a result of Black Friday sales pulling spending forward. However, this decline has dragged retail trade down to its lowest level in 12 months.
Of greater interest, retail trade volumes (adjusted for inflation) ticked up over the December quarter, rising 0.8%. Despite this, retail trade volumes have remain little changed over the last two years, up only 0.8% from December 2021. This is despite strong population growth recorded over the same period, indicating spending per person continues to decline as higher living costs continue to weigh on households.
China battles deflation
In contrast to the inflationary challenge being faced in most economies around the world, China continues to battle accelerating deflation with consumer prices falling 0.8% over the year to January.
This is the fourth straight month of decline in consumer prices and the biggest fall in just over 14 years. The decline comes on the back of weaker than expected demand and a fall in energy prices, with food prices falling at record pace and the decline in transport costs quickening.
The result highlights one of the economic challenges facing China, with the current levels of consumption proving to be insufficient to maintain prices.
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