ALMOST 30,000 jobs were lost in December, with part-time workers feeling most of the pain.

Full-time employment rose by 24,500 to eight million in December but part-time employment was down 53,700 to 3.37 million

Despite the big drop in overall job numbers the unemployment rate remained at 5.2 per cent.

This was because fewer people were actually looking for work and have fallen out of the labour market and participation rate.

The big drop in part-time employment reflects tough times in seasonal industries such as retail and hospitality.

The weak job data is adding to the case for interest rate cuts next month, economists say.

HSBC chief economist Paul Bloxham said the data made a cash rate cut by the Reserve Bank of Australia (RBA) more likely.

"The data shows that unemployment has been on a slow grind for some time now," Mr Bloxham said.

"I think this is still consistent with the RBA cutting interest rates next month, which is what we expect to happen.

"With the participation rate falling and employment also falling, it does look as though the labour market is still softening."

Total employment fell 293,000 to 11,421,300 in the month, according to figures released by the Australian Bureau of Statistics (ABS).

The forecast was for total employment to have risen by 5,000 in December with the unemployment rate at 5.3 per cent, according to the median of 13 economists surveyed by AAP.

Full-time employment rose by 24,500 to 8.051 million in December while part-time employment was down 53,700 to 3.37 million, the ABS reported.

The December participation rate was 65.2 per cent, compared with an unrevised 65.5 per cent in November.
The participation rate was forecast to be 65.5 per cent.

The Australian dollar plummeted about one third of a US cent after the ABS released the latest job data.

CMC markets foreign exchange dealer Tim Waterer said the headline reading of 29,000 jobs being shed prompted the sell-off.

"The break-down showed there as a decent rise in full-time jobs," Mr Waterer said.

"24,000 full times jobs were created and the reason for the headline numbers was part time jobs lost.

The dollar bounced back quickly before slipping again.

The figures released at 11.30 (AEDT) showed unemployment dropped to 5.2 per cent, in-line with market expectations.

Total employment fell 293,000 to 11,421,300 in the month.

At 11.29 (AEDT), prior to the data release, the dollar was at 104.23 US cents before dropping to 103.94 US cents 1131 AEDT.

It had recovered slightly by 11.34 (AEDT), climbing back up to more than 104 US cents before dropping again to 103.94 at 11.43 (AEDT). By 11.55 (AEDT) it was at 104.04

"The other shining light you can read in that was a fall in the unemployment rate," Mr Waterer said of the ABS figures.

He said he expected to see the Australian dollar recover throughout the afternoon.

Link -
http://www.heraldsun.com.au/business/jobs-market-still-weak-economists-say/story...
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Anyone notice a small problem?

Ex Dame Pansi wrote on Jan 20^th, 2012 at 11:21am:


Some would no doubt have to be Baby Boomers, but they are only set to average about 80,000 per month, so "something else" went into these figures?

If the figures were true and continued, then there would be no workforce at all, after only 3 years, so clearly something is wrong with these figures!

For those (like me) who are not up to scratch on all of the global economic indicators. So it looks like something is affecting the shipment of raw materials and all the while Wall Street seems to be ignoring any sign of trouble, maybe they think if they ignore it for long enough it will go away.
..............................................................

Baltic Dry Index

Economic Implications

This index is one of the purest leading indicators of economic activity. It measures the demand to move raw materials and precursors to production. Consumer spending and other economic indicators are backward looking, meaning they examine what has already occurred. The BDI offers a real time glimpse at global raw material and infrastructure demand. This could also be gleaned from looking at commodity prices, but there are substitution effects and futures contracts that make it difficult to interpret the impact of commodity price fluctuations. Additionally, nearly all commodities are seeing severe increases in prices in 2008 regardless of supply situations as investors seek to hedge their inflation exposure with hard assets.

Unlike stock and commodities markets, the Baltic Dry Index is totally devoid of speculative players.

http://www.wikinvest.com/index/Baltic_Dry_Index_-_BDI_%28BALDRY%29

Spain Announces Beginning Of End: The Unfolding Global Fiasco Is Near

The primary reason for my bearishness regarding Europe is that accelerating economic contractions in PIIGS nations will cause them to violate fiscal targets that they have only recently agreed to. In fact, these commitments will be violated by a wide margin.

These incremental deficits have to be financed. As it is, Europe has not figured out how they will finance the deficits previously agreed to, much less new deficits. For countries such as Spain, Portugal and Italy, a showdown with Germany over the breech of commitments and the securing additional financing looms.

Spain To Miss Fiscal Targets By Wide Margin
In various articles I have said that the endgame in Europe will probably take the form of PIIGS economies shrinking more than expected, their revenues shrinking more than expected and fiscal deficits ballooning more than expected. All of this will cause fiscal targets and commitments to be violated on the part of PIIGS. This in turn will lead to a showdown with Germany centered on how such shortfalls will be handled.

Spain has now begun the process of acknowledging publicly that it will violate its commitments under recent accords; it is preparing the way for confrontation. According to various reports, Budget Minister Cristobol Montoro has warned that Spain will not meet its target deficit of 4.4% of GDP in 2012. Montoro said that this target was based on an outdated forecast of 2.3% economic growth for Spain in 2012 made by the previous government.

In my view, the absolute best-case scenario for Spain’s GDP growth in 2012 will be a contraction of -2.0%. My own base case estimate is for a contraction of -3.5%. A contraction that exceeds -5.0% is entirely plausible.

Who Will Finance The Additional Debt?
Extraordinary political and economic Pan European efforts were made during the second half of 2011 to cobble together a series of gut-wrenching agreements and compromises that would enable the financing of targeted fiscal deficits for the PIIGS in 2012 – in the case of Spain a deficit of -4.4% of GDP.

As it is, it has thus far been impossible for European nations to fund the EFSF financing mechanism that would ensure financings and roll-overs for Spain and other PIIGS in 2012.

Thus, the question arises: If it has been impossible to secure mechanisms that would ensure financing of a Spanish fiscal deficit of -4.4% of GDP, how is a fiscal deficit of -9.0% or more going to be financed?

Conclusion
The bottom line is this: The market has not yet come to terms with the fact that the PIIGS are in a midst of an economic contraction that will cause them to violate their recently agreed fiscal commitments by a wide margin. The size of the economic contraction in the PIIGS will be much greater than is currently forecast, and as a result, the size of the fiscal shortfalls will be enormously greater than currently forecast.

These fiscal shortfalls can only be financed through additional bailouts that must be directly and/or indirectly financed by the Germans – whether it be through financing mechanisms such as the EFSF or through the ECB. Worse still, for reasons I have discussed previously, PIIGS are fundamentally insolvent under the euro system and therefore the Germans have no realistic hope of ever being paid back.

Will the Germans go for it? Maybe, maybe not. What I am relatively certain about is that the Germans will offer up enormous resistance, at least at first. Thus, when the inevitable confrontation occurs and moment of decision arrives, global equity markets will be 20%-25% lower than they are presently.

I maintain my view that prior to late April of 2012, the S&P 500 will have initiated another leg down that will eventually take it to the 950-1,020 range. Notwithstanding the bullish configuration of the overall equity market, medium-term and long-term investors with cash should avoid the temptation of buying stocks and chasing them into this “bear trap.”

Link -
http://seekingalpha.com/article/321027-spain-announces-beginning-of-end-the-unfo...
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I happen to think that equity markets will go quite a bit lower, as there are adverse issues, other than Europes PIIGS!

perceptions_now wrote on Jan 25^th, 2012 at 11:41am:


Economic growth was God...it was allways going to come unstuck sooner or later...there was never a magic pudding...
I think the growth they have forecast is wildly optimistic.
Simple solution for us though with the world's greatest treasurer...he can just go out and borrow some more cash to tide us over. 
Give everyone a couple of grand each, now what could go wrong.

perceptions_now wrote on Jan 25^th, 2012 at 5:30pm:


He got an award and everything...and yes I did.
...and yes I did again...

Stocks Finish Mixed After GDP Data Disappoints

U.S. stocks finished mixed Friday as good consumer sentiment data failed to distract investors from a disappointing read on gross domestic product.

The Dow Jones Industrial Average slumped 74.2 points, or 0.6%, at 12,660, with Chevron(CVX_), the second-largest U.S. energy company, weighing on the index following disappointing quarterly earnings. The energy stock was down over 2%.

The S&P 500 fell 2.1 points, or 0.2%, at 1,316, and the Nasdaq finished in positive territory, up 11.3 points, or 0.4%, at 2,817 with the help of some decent technology earnings.

"The market is pulling back on a weaker GDP number notwithstanding improving consumer sentiment," says Peter Cardillo, chief market economist at Rockwell Global Capital. "However, I don't see the decline revising the upward trend, since lower economic growth in this quarter has been factored in."

The Bureau of Economic Analysis reported early Friday that the total output of goods and services in the U.S. expanded 2.8% during the fourth quarter, which was less than the 3.1% expansion that economists polled by Thomson Reuters were expecting. Much of the increase was driven by positive contributions from private inventory investment. Private inventories added 1.94 percentage points to the fourth-quarter change, with private businesses increasing inventories by $56 billion in the fourth quarter, following a decrease of $2 billion in the third quarter.

In the third-quarter, gross domestic product increased 1.8%.

"The first thought that came to my mind when GDP came in lighter than expected was whether this is what caused the more dovish sounding Fed on Tuesday," said James "Rev Shark" DePorre, founder and CEO of Shark Asset Management. "The issue now is whether hopes of QE3 offset any worries about a slowing economy. If you look at the action in the market since March 2009 the answer has been resounding: don't fight the Fed."

Link -
http://www.thestreet.com/_yahoo/story/11387219/1/stock-market-story-jan-27.html?...
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There are some things that "uncle Ben" can do & some things he can not do!

What he absolutely can not do, is put the USA, Europe & the Global Economy, back on a REAL GDP GROWTH TREND, by simply relying on Trillions of thin air invented $'s, in an environment where Demand is shrinking, due to Demographic growth decline, where REAL COSTS ARE INCREASING, due Energy cost pressures and where the stables of FOOD & WATER are coming under increasing stress, due to Climate Change.

At some point, the FLOOD OF THIN AIR INVENTED $'s will overwhelm the system, the DAM WILL BURST and the REAL CONSEQUENCES will surface!