Consumer price inflation in Australia softened to a three-year low in August due to government subsidies for electricity prices, while core inflation touched its lowest since early 2022 in the welcome progress that could ultimately open the door to rate cuts.

The market reaction was muted, though, as the central bank has already said it's going to look through the headline inflation decline, which is transient and insufficient to warrant near-term cuts.

The Australian dollar still came off its 1-1/2-year high and was last flat at $0.6891, while three-year bond futures were little changed at 96.63.

Swaps imply a 75 per cent chance the Reserve Bank of Australia will be able to begin cutting rates in December after it held policy steady and didn't discuss the option to hike yesterday.

Australia Bureau of Statistics data on Wednesday showed that its monthly consumer price index rose to an annual pace of 2.7 per cent for August from 3.5 per cent for July, within the forecast of markets.

That is owing to electricity subsidies from the federal and state governments, which lowered prices by almost 15 per cent for August, said the ABS. Otherwise, they would have risen 0.1 per cent.

Petrol prices also eased 3.1 per cent in the month.

More encouragingly, when volatile items and holiday travel were stripped out, the CPI retreated to 3 per cent, within the target band of 2-3 per cent, from July's 3.7 per cent.

Another closely watched measure of core inflation-the trimmed mean-also slowed to an annual 3.4 per cent, from 3.8 per cent in July. The RBA expects it to be at 3.5 per cent by the end of the year.

"What really matters - and as the RBA keeps reminding us - is the sustainable return of underlying inflation to target. That’s still a little way off, but August’s print shows momentum is moving in the right direction," said Harry Murphy Cruise, economist at Moody’s Analytics.

"We’re still of the view that rate cuts won’t come until February, but the risk of it being any later than that is diminishing."

The RBA has maintained rates unchanged since November, deciding that the cash rate of 4.35 per cent, rising from pandemic lows of 0.1 per cent, is enough to nudge inflation into its target band of 2-3 per cent without sacrificing its hard-won gains in jobs.

However, underlying inflation - which was running last quarter at 3.9 per cent - has only fallen a little over the past year, one reason why policymakers were not so confident that inflation is moving toward the target range.

Treasurer Jim Chalmers said on Wednesday that those inflation numbers are "heartening," "encouraging," and "welcome," providing a number of measures, including the underlying inflation, that have come off.

"But we're not getting carried away because we know that monthly numbers can be volatile. We know that inflation doesn't always moderate in a straight line," Chalmers told a press conference in Brisbane.

The monthly report also provided the first update on many services for the quarter, with services inflation standing at 4.2 per cent in August from a year ago, slowing only a little from July's 4.4 per cent.

"Providing the falls in underlying inflation noted today are replicated in the all-important Q3 inflation numbers, it sets up a dovish pivot from the RBA at its meeting on November 5th before a first-rate 25bp rate cut in December," said Tony Sycamore, analyst at IG.

Consumer price inflation in Australia softened to a three-year low in August due to government subsidies for electricity prices, while core inflation touched its lowest since early 2022 in the welcome progress that could ultimately open the door to rate cuts.

Consumer price inflation in Australia softened to a three-year low in August due to government subsidies for electricity prices, while core inflation touched its lowest since early 2022 in the welcome progress that could ultimately open the door to rate cuts. The market reaction was muted, though, as the central bank has already said it's going to look through the headline inflation decline, which is transient and insufficient to warrant near-term cuts. The Australian dollar still came off its 1-1/2-year high and was last flat at $0.6891, while three-year bond futures were little changed at 96.63. Swaps imply a 75 per cent chance the Reserve Bank of Australia will be able to begin cutting rates in December after it held policy steady and didn't discuss the option to hike yesterday. Australia Bureau of Statistics data on Wednesday showed that its monthly consumer price index rose to an annual pace of 2.7 per cent for August from 3.5 per cent for July, within the forecast of markets. That is owing to electricity subsidies from the federal and state governments, which lowered prices by almost 15 per cent for August, said the ABS. Otherwise, they would have risen 0.1 per cent. Petrol prices also eased 3.1 per cent in the month. More encouragingly, when volatile items and holiday travel were stripped out, the CPI retreated to 3 per cent, within the target band of 2-3 per cent, from July's 3.7 per cent. Another closely watched measure of core inflation-the trimmed mean-also slowed to an annual 3.4 per cent, from 3.8 per cent in July. The RBA expects it to be at 3.5 per cent by the end of the year. "What really matters - and as the RBA keeps reminding us - is the sustainable return of underlying inflation to target. That’s still a little way off, but August’s print shows momentum is moving in the right direction," said Harry Murphy Cruise, economist at Moody’s Analytics. "We’re still of the view that rate cuts won’t come until February, but the risk of it being any later than that is diminishing." The RBA has maintained rates unchanged since November, deciding that the cash rate of 4.35 per cent, rising from pandemic lows of 0.1 per cent, is enough to nudge inflation into its target band of 2-3 per cent without sacrificing its hard-won gains in jobs. However, underlying inflation - which was running last quarter at 3.9 per cent - has only fallen a little over the past year, one reason why policymakers were not so confident that inflation is moving toward the target range. Treasurer Jim Chalmers said on Wednesday that those inflation numbers are "heartening," "encouraging," and "welcome," providing a number of measures, including the underlying inflation, that have come off. "But we're not getting carried away because we know that monthly numbers can be volatile. We know that inflation doesn't always moderate in a straight line," Chalmers told a press conference in Brisbane. The monthly report also provided the first update on many services for the quarter, with services inflation standing at 4.2 per cent in August from a year ago, slowing only a little from July's 4.4 per cent. "Providing the falls in underlying inflation noted today are replicated in the all-important Q3 inflation numbers, it sets up a dovish pivot from the RBA at its meeting on November 5th before a first-rate 25bp rate cut in December," said Tony Sycamore, analyst at IG.

Australia's inflation eases to 3-year low in August, core inflation also declines

About two-thirds of baby boomers retiring from full-time work in Australia are inadequately prepared to retire, according to a report by the industry's top body released on Wednesday.

According to the Association of Superannuation Funds of Australia, slightly over 30 per cent of Australians can afford a decent lifestyle in retirement. The medium pension account balance for men 60-64 years of age was at A$205,385 as of June 2022 and A$153,685 for women the same age, far from the industry's accepted comfortable retirement standard of A$690,000 for couples and A$595,000 for singles.

But now that the nation's pension pool is approaching A$4 trillion and some 2.5 million Australians are expected to retire in the coming decade, superannuation becomes a critical line of defence for many a retirement purse. Compulsorily foisted on the workforce in 1992, its mandatory contribution to superannuation is now 11.5 per cent of wages and will increase to 12 per cent next year.

Still, as the pension system matures and balances rise, the percentage of people retiring with enough money to fund a comfortable lifestyle will climb to 50 per cent or more by 2050, ASFA Chief Executive Officer Mary Delahunty said in an interview.

“The people retiring now have not had a full benefit for their working life,” Delahunty said. “So they will still require a good level of government help, or help from the rest of us, to be able to retire with dignity.”

Retirement savings anxiety persists, even in a country like Australia which regularly ranks atop the world's top pension systems. Some 40 per cent of Australians say they'll never have enough money to retire, a figure that seems paradoxical given that this country boasts one of the world's most envied pensions systems, a Natixis Investment Managers survey released last week indicated.

“Lots of people are concerned about the comfort and ability of retirees at the moment because of the cost of living rises,” Delahunty said.

Balances were down slightly in the 12 months to June 2022 compared to the previous year due to poor investment returns, but have since averaged an annual return of more than 9 per cent, Delahunty said.

The Australian pension system is also contributing its quota to the easing of pressure on the public purse. According to a 2023 report by the government, spending on pensions is predicted to decline to 2 per cent of gross domestic product in 40 years, despite this ageing population, mainly because superannuation is increasingly funding retirement.

But a gender gap at work means every age cohort also has a pension pot that is unequal, said Delahunty. Male balances, on average, are A$182,667, while females average A$146,146, according to ASFA.

A shortage of financial advisers is another challenge to the sector. The government has proclaimed a range of proposed reforms for the sector.

About two-thirds of baby boomers retiring from full-time work in Australia are inadequately prepared to retire, according to a report by the industry's top body released on Wednesday.

About two-thirds of baby boomers retiring from full-time work in Australia are inadequately prepared to retire, according to a report by the industry's top body released on Wednesday. According to the Association of Superannuation Funds of Australia, slightly over 30 per cent of Australians can afford a decent lifestyle in retirement. The medium pension account balance for men 60-64 years of age was at A$205,385 as of June 2022 and A$153,685 for women the same age, far from the industry's accepted comfortable retirement standard of A$690,000 for couples and A$595,000 for singles. But now that the nation's pension pool is approaching A$4 trillion and some 2.5 million Australians are expected to retire in the coming decade, superannuation becomes a critical line of defence for many a retirement purse. Compulsorily foisted on the workforce in 1992, its mandatory contribution to superannuation is now 11.5 per cent of wages and will increase to 12 per cent next year. Still, as the pension system matures and balances rise, the percentage of people retiring with enough money to fund a comfortable lifestyle will climb to 50 per cent or more by 2050, ASFA Chief Executive Officer Mary Delahunty said in an interview. “The people retiring now have not had a full benefit for their working life,” Delahunty said. “So they will still require a good level of government help, or help from the rest of us, to be able to retire with dignity.” Retirement savings anxiety persists, even in a country like Australia which regularly ranks atop the world's top pension systems. Some 40 per cent of Australians say they'll never have enough money to retire, a figure that seems paradoxical given that this country boasts one of the world's most envied pensions systems, a Natixis Investment Managers survey released last week indicated. “Lots of people are concerned about the comfort and ability of retirees at the moment because of the cost of living rises,” Delahunty said. Balances were down slightly in the 12 months to June 2022 compared to the previous year due to poor investment returns, but have since averaged an annual return of more than 9 per cent, Delahunty said. The Australian pension system is also contributing its quota to the easing of pressure on the public purse. According to a 2023 report by the government, spending on pensions is predicted to decline to 2 per cent of gross domestic product in 40 years, despite this ageing population, mainly because superannuation is increasingly funding retirement. But a gender gap at work means every age cohort also has a pension pot that is unequal, said Delahunty. Male balances, on average, are A$182,667, while females average A$146,146, according to ASFA. A shortage of financial advisers is another challenge to the sector. The government has proclaimed a range of proposed reforms for the sector.

Australian retirees have less than half the funds required for a comfortable retirement

Australia is preparing for its upcoming budget, but the financial projections are far from the strong revenue upgrades witnessed in previous years, Bloomberg News reported.<o:p></o:p>

Citing a combination of factors including a sluggish global economy, a softened labour market, and decreased commodity prices, the Treasurer's office forecasts an uptick in tax receipts, excluding GST, amounting to approximately A$25 billion over forward estimates. <o:p></o:p>

This figure pales in comparison to the average upgrade of A$129 billion observed in the past three budgets, as reported by Bloomberg. <o:p></o:p>

The subdued revenue outlook indicates ongoing challenges for Australia's economy, despite efforts by the centre-left Labour government to maintain fiscal discipline since assuming office in May 2022. <o:p></o:p>

The Treasurer, Jim Chalmers, acknowledged the economic challenges, noting a pragmatic approach in light of the prevailing conditions. <o:p></o:p>

"We are realistic about the challenges facing our economy and our budget. This includes not expecting the same sorts of massive revenue upgrades that we’ve seen in recent budget updates to continue," Bloomberg quoted Chalmers as saying. <o:p></o:p>

The government's strategy appears focused on mitigating immediate concerns, particularly inflationary pressures. <o:p></o:p>

Consequently, the majority of the anticipated revenue upgrade for the current fiscal year scheduled for allocation in the forthcoming budget, is aimed at alleviating inflationary strains.<o:p></o:p>

The Australian economy had witnessed an increase in commodity prices and maintained a tight labour market, culminating in a budget surplus for the fiscal year ending June 2023. <o:p></o:p>

However, the current picture presents a contrasting scenario, necessitating a recalibration of fiscal expectations. <o:p></o:p>

The subdued revenue projections indicate the balance policymakers must take between stimulating economic growth and curbing inflationary pressures. <o:p></o:p>

Despite the tempered revenue outlook, independent forecasters say that the projected upgrades may still fall short of addressing the broader economic challenges. <o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

Australia is preparing for its upcoming budget, but the financial projections are far from the strong revenue upgrades witnessed in previous years, Bloomberg News reported.

Australia is preparing for its upcoming budget, but the financial projections are far from the strong revenue upgrades witnessed in previous years, Bloomberg News reported. Citing a combination of factors including a sluggish global economy, a softened labour market, and decreased commodity prices, the Treasurer's office forecasts an uptick in tax receipts, excluding GST, amounting to approximately A$25 billion over forward estimates. This figure pales in comparison to the average upgrade of A$129 billion observed in the past three budgets, as reported by Bloomberg. The subdued revenue outlook indicates ongoing challenges for Australia's economy, despite efforts by the centre-left Labour government to maintain fiscal discipline since assuming office in May 2022. The Treasurer, Jim Chalmers, acknowledged the economic challenges, noting a pragmatic approach in light of the prevailing conditions. "We are realistic about the challenges facing our economy and our budget. This includes not expecting the same sorts of massive revenue upgrades that we’ve seen in recent budget updates to continue," Bloomberg quoted Chalmers as saying. The government's strategy appears focused on mitigating immediate concerns, particularly inflationary pressures. Consequently, the majority of the anticipated revenue upgrade for the current fiscal year scheduled for allocation in the forthcoming budget, is aimed at alleviating inflationary strains. The Australian economy had witnessed an increase in commodity prices and maintained a tight labour market, culminating in a budget surplus for the fiscal year ending June 2023. However, the current picture presents a contrasting scenario, necessitating a recalibration of fiscal expectations. The subdued revenue projections indicate the balance policymakers must take between stimulating economic growth and curbing inflationary pressures. Despite the tempered revenue outlook, independent forecasters say that the projected upgrades may still fall short of addressing the broader economic challenges. (With inputs from Bloomberg)

Australia anticipates a smaller revenue upgrade citing global economic weakness

Australia's economy faced sluggish growth in the December quarter, as household incomes dwindled and consumer spending stagnated, signaling a potential downward shift in interest rates.

Treasurer Jim Chalmers acknowledged the economic challenges, stating that the focus is now shifting from inflation to growth.

According to data from the Australian Bureau of Statistics (ABS), real gross domestic product (GDP) expanded by a mere 0.2 per cent in the fourth quarter, falling below expectations of 0.3 per cent.

This slowdown reflects the effectiveness of high borrowing costs in curbing demand, with annual growth dropping to 1.5 per cent, the lowest since early 2021.

The softness in domestic demand was evident in household spending patterns, as essentials saw a modest increase while discretionary spending declined.

Deloitte Access Economics partner Stephen Smith highlighted the impact of higher interest rates and living costs on Australian consumers, stressing the need for policy adjustments to stimulate economic growth.

The Reserve Bank of Australia (RBA) has implemented significant interest rate hikes to combat inflation, totaling 425 basis points since May 2022.

Despite headline inflation easing to two-year lows, persistent services price pressures have kept the possibility of further rate hikes on the table.

Treasurer Chalmers noted the need for a response to the shifting economic landscape, with a potential budget announcement in May.

Globally, economic growth has slowed, with countries like Japan, Britain, and the euro zone facing recessionary pressures.

In Australia, growth has been supported by record immigration, yet per capita GDP fell by 0.3 per cent in the December quarter, marking the longest declining streak since 1982.

While the household saving ratio rebounded slightly, it remained subdued, indicating ongoing economic challenges.

Net trade emerged as a significant driver of growth, with reduced imports contributing positively to fourth-quarter GDP growth.

Looking ahead, analysts anticipate further economic slowdown before a potential recovery in the second half of the year.

Market expectations point to the possibility of the RBA implementing its first rate cut in August, signaling a shift towards growth-focused policies.

(With inputs from Reuters)

Australia's economy faced sluggish growth in the December quarter, as household incomes dwindled and consumer spending stagnated, signaling a potential downward shift in interest rates.

Australia's economy faced sluggish growth in the December quarter, as household incomes dwindled and consumer spending stagnated, signaling a potential downward shift in interest rates. Treasurer Jim Chalmers acknowledged the economic challenges, stating that the focus is now shifting from inflation to growth. According to data from the Australian Bureau of Statistics (ABS), real gross domestic product (GDP) expanded by a mere 0.2 per cent in the fourth quarter, falling below expectations of 0.3 per cent. This slowdown reflects the effectiveness of high borrowing costs in curbing demand, with annual growth dropping to 1.5 per cent, the lowest since early 2021. The softness in domestic demand was evident in household spending patterns, as essentials saw a modest increase while discretionary spending declined. Deloitte Access Economics partner Stephen Smith highlighted the impact of higher interest rates and living costs on Australian consumers, stressing the need for policy adjustments to stimulate economic growth. The Reserve Bank of Australia (RBA) has implemented significant interest rate hikes to combat inflation, totaling 425 basis points since May 2022. Despite headline inflation easing to two-year lows, persistent services price pressures have kept the possibility of further rate hikes on the table. Treasurer Chalmers noted the need for a response to the shifting economic landscape, with a potential budget announcement in May. Globally, economic growth has slowed, with countries like Japan, Britain, and the euro zone facing recessionary pressures. In Australia, growth has been supported by record immigration, yet per capita GDP fell by 0.3 per cent in the December quarter, marking the longest declining streak since 1982. While the household saving ratio rebounded slightly, it remained subdued, indicating ongoing economic challenges. Net trade emerged as a significant driver of growth, with reduced imports contributing positively to fourth-quarter GDP growth. Looking ahead, analysts anticipate further economic slowdown before a potential recovery in the second half of the year. Market expectations point to the possibility of the RBA implementing its first rate cut in August, signaling a shift towards growth-focused policies. (With inputs from Reuters)

Sluggish growth sparks talks of rate cuts in Australia

One of the key risks weighing on the Australian economy in 2023 would be natural disasters, said Treasurer Jim Chalmers, according to Bloomberg.

Inflation was fueled by flooding, which cost the Australian economy over $ 3.5 billion, or a quarter of a per cent of the gross domestic product (GDP) in the fiscal year 2021–2022.

Before visiting the state of New South Wales to assess the reconstruction efforts in the wake of the disastrous floods in 2022, Chalmers released that government analysis.

He warned that the economy hadn't yet fully recovered from the previous year's floods and that the May budget would include a section on Australia's disaster readiness.

Also Read |&nbsp;<a href="http://www.wionnews.com/world/australias-economy-slows-ahead-of-election-201452" hreflang="en">Australia's economy slows ahead of election</a>

"In Australia, we're always conscious that natural disasters have the ability to throw us off course, and we expect this uncertainty to be one of the key factors weighing on our economy in 2023," Chalmers told Bloomberg.

According to the Treasury analysis, flooding contributed to a more than 16 per cent increase in fruit and vegetable costs in the year to September, and prices were predicted to rise further.

Watch |&nbsp;<a href="http://13.235.153.162/videos/world-business-watch-australias-economy-rebounds-sharply-in-q3-growth-beats-forecast-346832" hreflang="en">World Business Watch: Australia's economy rebounds sharply in Q3, growth beats forecast</a>

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="http://13.235.153.162/videos/world-business-watch-australias-economy-rebounds-sharply-in-q3-growth-beats-forecast-346832/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

According to data from the National Emergency Agency, 68 per cent of the Australian population resided in a region affected by a natural disaster last year.

A tropical cyclone-induced flood that occurred last week in Western Australia's remote northwest Kimberley Region isolated numerous rural communities and caused damage to homes and infrastructure.

(With inputs from agencies)

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One of the key risks weighing on the Australian economy in 2023 would be natural disasters, said Treasurer Jim Chalmers, according to Bloomberg. Inflation was fueled by flooding, which cost the Australian economy over $ 3.

One of the key risks weighing on the Australian economy in 2023 would be natural disasters, said Treasurer Jim Chalmers, according to Bloomberg. Inflation was fueled by flooding, which cost the Australian economy over $ 3.5 billion, or a quarter of a per cent of the gross domestic product (GDP) in the fiscal year 2021–2022. Before visiting the state of New South Wales to assess the reconstruction efforts in the wake of the disastrous floods in 2022, Chalmers released that government analysis. He warned that the economy hadn't yet fully recovered from the previous year's floods and that the May budget would include a section on Australia's disaster readiness. Also Read | Australia's economy slows ahead of election "In Australia, we're always conscious that natural disasters have the ability to throw us off course, and we expect this uncertainty to be one of the key factors weighing on our economy in 2023," Chalmers told Bloomberg. According to the Treasury analysis, flooding contributed to a more than 16 per cent increase in fruit and vegetable costs in the year to September, and prices were predicted to rise further. Watch | World Business Watch: Australia's economy rebounds sharply in Q3, growth beats forecast According to data from the National Emergency Agency, 68 per cent of the Australian population resided in a region affected by a natural disaster last year. A tropical cyclone-induced flood that occurred last week in Western Australia's remote northwest Kimberley Region isolated numerous rural communities and caused damage to homes and infrastructure. (With inputs from agencies) WATCH WION LIVE HERE:

After a $3.5 billion hit, natural disasters to weigh on Australia's economy

A measure of Australian business conditions extended its blistering run to reach all-time highs in May with sales, profits and employment all up strongly, a sign the economy has the momentum to cope with a coronavirus lockdown.

Australia business activity climbs to fresh highs in May, says survey

Australia on Thursday unveiled its biggest shakeup in bankruptcy laws in nearly three decades.

Australia to overhaul bankruptcy laws to help firms over COVID-19

Australia has slipped into recession for the first time in 30 years. The great run of 28 successive years of growth has ended.

Gravitas: Australia Sinks Into Recession

Australia is set to face the largest budget deficit since World War II when the federal government hands down the country's economic standing on October 6. Watch report.

Australia's biggest deficit since world war 2

Sitting on the fringe of blackened forests, an Australian town Kangaroo Valley narrowly escaped the inferno that swollen its surrounding areas early this month. But for restaurant owner, Monique Moul, surviving the deadly bushfires is the beginning of another trouble as she struggles to salvage the business.

Businesses in Australian town hopes receded bushfires will draw tourists back

Australian employment suffered its sharpest fall in three years last month, data showed on Thursday, underlining the need for urgent stimulus to revive economic activity and wages.

The local dollar fell a third of a cent to $0.6806&nbsp;as the market narrowed the odds on a rate cut from the Reserve Bank of Australia (RBA) in December, though it was still considered an outside chance.

The disappointing report will also pile political pressure on the conservative government of Prime Minister Scott Morrison to launch a fiscal rescue package for the economy.

Morrison has so far resisted all calls for action, in part by citing continued strength of the labour market.

That position will be harder to defend given net new jobs fell 19,000 in October, the largest drop since late 2016. The unemployment rate also nudged up to 5.3 per cent, reversing a promising dip in September.

Analysts polled by Reuters had forecast a gain of 15,000 jobs and an unemployment rate of 5.3 per cent.&nbsp;

"Slower employment growth also presents an additional challenge for the RBA's outlook for a recovery in consumer spending," said NAB economist Kaixin Owyong.

"Ideally the government would step in to deliver an additional fiscal stimulus, but if this fails to eventuate the RBA could adopt unconventional policy and cut the cash rate to 0.25 per cent."

The central bank has already cut rates three times to a historic low of 0.75 per cent, but so far the only impact has been a revival in-home price inflation.

Financial markets imply around a 24 per cent&nbsp;probability of a quarter-point easing at the RBA's next meeting on Dec. 3, rising to 62% for February.

Just last week the RBA threw in the towel on getting wages going, forecasting miserly annual growth of 2.3 per cent&nbsp;right out to 2021. Indeed, data out on Wednesday showed wage growth actually went backwards to 2.2 per cent&nbsp;in the September quarter.

Up until now, Australia's problem was not a dearth of hiring. Some 251,800 net new positions were created in the year to October, with the majority full time.

Annual jobs growth ran at a solid 2.0 per cent, comfortably above the latest US&nbsp;performance of 1.4 per cent.

The trouble, ironically, is that the labour market has proved too flexible in providing the workers needed to fill those jobs. All the growth in employment was met by an increased supply of labour, thus keeping the jobless rate up.

Participation in the workforce is up near-record peaks at 66.0 per cent&nbsp;and, adding in those who want to work more hours, the underutilisation rate was a high 13.8 per cent.

This phenomenon is partly a direct result of government policy. Extending childcare and disability payments have lifted the share of females in the workforce to all-time peaks.

The conservative government of Prime Minister Scott Morrison has also kept the doors wide open to skilled migration, with net arrivals running at almost 300,000 in the year to September, the highest in more than five years.

It has also imposed caps on pay rises for the public sector which has kept growth well under 3% for every year since 2013.

Australian employment suffered its sharpest fall in three years last month, data showed on Thursday, underlining the need for urgent stimulus to revive economic activity and wages.

Australian employment suffered its sharpest fall in three years last month, data showed on Thursday, underlining the need for urgent stimulus to revive economic activity and wages. The local dollar fell a third of a cent to $0.6806 as the market narrowed the odds on a rate cut from the Reserve Bank of Australia (RBA) in December, though it was still considered an outside chance. The disappointing report will also pile political pressure on the conservative government of Prime Minister Scott Morrison to launch a fiscal rescue package for the economy. Morrison has so far resisted all calls for action, in part by citing continued strength of the labour market. That position will be harder to defend given net new jobs fell 19,000 in October, the largest drop since late 2016. The unemployment rate also nudged up to 5.3 per cent, reversing a promising dip in September. Analysts polled by Reuters had forecast a gain of 15,000 jobs and an unemployment rate of 5.3 per cent. "Slower employment growth also presents an additional challenge for the RBA's outlook for a recovery in consumer spending," said NAB economist Kaixin Owyong. "Ideally the government would step in to deliver an additional fiscal stimulus, but if this fails to eventuate the RBA could adopt unconventional policy and cut the cash rate to 0.25 per cent." The central bank has already cut rates three times to a historic low of 0.75 per cent, but so far the only impact has been a revival in-home price inflation. Financial markets imply around a 24 per cent probability of a quarter-point easing at the RBA's next meeting on Dec. 3, rising to 62% for February. Just last week the RBA threw in the towel on getting wages going, forecasting miserly annual growth of 2.3 per cent right out to 2021. Indeed, data out on Wednesday showed wage growth actually went backwards to 2.2 per cent in the September quarter. Up until now, Australia's problem was not a dearth of hiring. Some 251,800 net new positions were created in the year to October, with the majority full time. Annual jobs growth ran at a solid 2.0 per cent, comfortably above the latest US performance of 1.4 per cent. The trouble, ironically, is that the labour market has proved too flexible in providing the workers needed to fill those jobs. All the growth in employment was met by an increased supply of labour, thus keeping the jobless rate up. Participation in the workforce is up near-record peaks at 66.0 per cent and, adding in those who want to work more hours, the underutilisation rate was a high 13.8 per cent. This phenomenon is partly a direct result of government policy. Extending childcare and disability payments have lifted the share of females in the workforce to all-time peaks. The conservative government of Prime Minister Scott Morrison has also kept the doors wide open to skilled migration, with net arrivals running at almost 300,000 in the year to September, the highest in more than five years. It has also imposed caps on pay rises for the public sector which has kept growth well under 3% for every year since 2013.

Australian jobs suffer biggest drop in three years

Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist.

The <a href="https://www.wionews.com/world/us-expands-blacklist-to-include-chinas-top-ai-startups-ahead-of-trade-talks-254672">US&nbsp;government has widened its trade blacklist </a>to include some of China's top artificial intelligence start-ups, punishing Beijing for its treatment of mostly Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week.

The Australian dollar, a global risk barometer, was last up 0.3 per cent&nbsp;at $0.6744 and the New Zealand dollar rose 0.4 per cent&nbsp;to $0.6319.

China's yuan was up 0.5 per cent&nbsp;at 7.1308 against the dollar in offshore trading.

The euro was up 0.3 per cent&nbsp;at $1.09785. The index that tracks the dollar against a basket of six other currencies was down 0.1 per cent&nbsp;at 99.007.

"Risk is looking reasonably better, but anyone who is trading the trade war knows that the impact of good news will be fading," said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

"I think it pays off to be sceptical in terms of expectations of something exceptional happening during the<a href="https://www.wionews.com/world/us-china-trade-talks-to-resume-thursday-white-house-254346"> US-China trade talks this week,"</a> Stretch said.

The biggest move in the foreign exchange market, however, was an early morning plunge in the Swedish crown, both against the euro and the dollar, on concerns the <a href="https://www.wionews.com/world/persecution-of-the-uyghurs-us-blacklists-28-chinese-companies-over-uighur-abuses-in-xinjiang-254355">US-China conflict over trade and foreign policy </a>was nowhere near a resolution and was increasingly damaging the global economy.

Sweden's open economy makes the crown vulnerable to global growth dynamics and therefore to the trade dispute between the world's two biggest economies, which has hurt growth in the two years since US&nbsp;President Donald Trump ignited the trade war.

The Swedish crown was last steady, after falling earlier to a 10-year low of 10.9230 against the euro and a 17-year low of 9.9639 against the dollar.

"It's a remarkable move," said Stephen Gallo, European head of FX strategy at BMO Capital Markets. "You cannot get a clearer trend here. The fall reflects deepening worsening global outlook."

Gallo expects the crown to fall to 11 against the common currency, close to levels not seen since the financial crisis. Sweden's competitiveness as an exporter led to the crown's decline, he said.

The euro was a sell against the dollar, though, since it was likely to maintain its status as a safe-haven currency and US&nbsp;investors were likely to keep their dollars at home, he added.

Chinese Vice Premier Liu He is due to arrive this week in Washington for trade talks. He is expected to meet US&nbsp;Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist.

Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist. The US government has widened its trade blacklist to include some of China's top artificial intelligence start-ups, punishing Beijing for its treatment of mostly Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week. The Australian dollar, a global risk barometer, was last up 0.3 per cent at $0.6744 and the New Zealand dollar rose 0.4 per cent to $0.6319. China's yuan was up 0.5 per cent at 7.1308 against the dollar in offshore trading. The euro was up 0.3 per cent at $1.09785. The index that tracks the dollar against a basket of six other currencies was down 0.1 per cent at 99.007. "Risk is looking reasonably better, but anyone who is trading the trade war knows that the impact of good news will be fading," said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets. "I think it pays off to be sceptical in terms of expectations of something exceptional happening during the US-China trade talks this week," Stretch said. The biggest move in the foreign exchange market, however, was an early morning plunge in the Swedish crown, both against the euro and the dollar, on concerns the US-China conflict over trade and foreign policy was nowhere near a resolution and was increasingly damaging the global economy. Sweden's open economy makes the crown vulnerable to global growth dynamics and therefore to the trade dispute between the world's two biggest economies, which has hurt growth in the two years since US President Donald Trump ignited the trade war. The Swedish crown was last steady, after falling earlier to a 10-year low of 10.9230 against the euro and a 17-year low of 9.9639 against the dollar. "It's a remarkable move," said Stephen Gallo, European head of FX strategy at BMO Capital Markets. "You cannot get a clearer trend here. The fall reflects deepening worsening global outlook." Gallo expects the crown to fall to 11 against the common currency, close to levels not seen since the financial crisis. Sweden's competitiveness as an exporter led to the crown's decline, he said. The euro was a sell against the dollar, though, since it was likely to maintain its status as a safe-haven currency and US investors were likely to keep their dollars at home, he added. Chinese Vice Premier Liu He is due to arrive this week in Washington for trade talks. He is expected to meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

Australian dollar rises, euro up after China says open for partial trade deal

<a href="https://www.wionews.com/world/trump-asked-australia-for-help-discrediting-russia-probe-252947">Australia's</a> central bank on Tuesday lowered the cost of borrowing, slashing interest rates for the third time this year amid fears about the flagging domestic economy.

The Reserve Bank of Australia announced it had cut rates by another 25 basis points to 0.75 per cent, a decision that brings the country's interest rates to a historic new low.

The move is part of efforts to extend a record 28-year run without a recession, in the face of increasing economic headwinds that include stagnant employment levels, low wage growth and high household debt.

Resource-rich Australia dodged the worst of the financial crisis but the economy recently recorded its weakest annual growth in a decade, expanding just 1.4 percent in the year to June.

RBA governor Philip Lowe said the decision to lower the cash rate was designed to "support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target".&nbsp;

"The economy still has spare capacity and lower interest rates will help make inroads into that," he said in a statement following the bank's monthly policy meeting.

Lowe has forecast an "extended period" of low interest rates will be necessary to achieve full unemployment and reach the bank's inflation target, with the bank remaining "prepared to ease monetary policy further if needed".

Australia is also feeling the impact of<a href="https://www.wionews.com/opinions/us-china-trade-war-points-to-the-real-crisis-that-global-leaders-must-confront-at-g20-summit-231112"> US-China trade tensions</a>, which have rattled the global economy as central banks worldwide attempt to offset economic risks by lowering rates.

One bright light identified by Lowe, however, were recent signs of a turnaround in the Sydney and <a href="https://www.wionews.com/world/video-major-fire-breaks-out-in-melbourne-warehouse-no-casualties-162434">Melbourne</a> housing markets after a prolonged slump.

The Australian stock exchange moved slightly higher on the news, with the All Ordinaries reaching above 6,834 in afternoon trade, while the dollar was buying US$0.6728.

Australia's central bank on Tuesday lowered the cost of borrowing, slashing interest rates for the third time this year amid fears about the flagging domestic economy.

Australia's central bank on Tuesday lowered the cost of borrowing, slashing interest rates for the third time this year amid fears about the flagging domestic economy. The Reserve Bank of Australia announced it had cut rates by another 25 basis points to 0.75 per cent, a decision that brings the country's interest rates to a historic new low. The move is part of efforts to extend a record 28-year run without a recession, in the face of increasing economic headwinds that include stagnant employment levels, low wage growth and high household debt. Resource-rich Australia dodged the worst of the financial crisis but the economy recently recorded its weakest annual growth in a decade, expanding just 1.4 percent in the year to June. RBA governor Philip Lowe said the decision to lower the cash rate was designed to "support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target". "The economy still has spare capacity and lower interest rates will help make inroads into that," he said in a statement following the bank's monthly policy meeting. Lowe has forecast an "extended period" of low interest rates will be necessary to achieve full unemployment and reach the bank's inflation target, with the bank remaining "prepared to ease monetary policy further if needed". Australia is also feeling the impact of US-China trade tensions, which have rattled the global economy as central banks worldwide attempt to offset economic risks by lowering rates. One bright light identified by Lowe, however, were recent signs of a turnaround in the Sydney and Melbourne housing markets after a prolonged slump. The Australian stock exchange moved slightly higher on the news, with the All Ordinaries reaching above 6,834 in afternoon trade, while the dollar was buying US$0.6728.

Australia's central bank cuts rates to new record low

Australia's economic growth ground to a near halt in the second half of 2018, official data showed Wednesday, thrusting the issue to the front and centre of an already contentious general election campaign.

The figures released by Australia's statistics agency showed growth for October to December at 0.2 per cent, after a 0.3 per cent reading in the previous three months.

Conservative Prime Minister Scott Morrison has based his re-election campaign on stewardship of the economy and allegations that a centre-left Labor party government would spell an end to 28 years of continuous growth.

The figures showed annual growth last year at 2.3 per cent, but with growth slowing considerably in the second half of the year as consumer spending weakened and storm clouds gathered in the long-booming housing market.

Morrison has opened his chequebook ahead of the election, which is expected in May, announcing funding for a slew of community programmes. That appears to have been just enough to stop growth from grinding to a complete halt.

Public expenditure jumped by 1.8 per cent for the period and contributed 0.3 percentage points to GDP growth, while household consumption came in at a soft 0.4 per cent.

The central bank on Tuesday kept interested rates at a record low, but markets are increasingly expecting up to two cuts by the end of 2019.

"We believe the Bank will be increasingly uncomfortable with the 'growing tension between strong labour market data and softer GDP data' as the weakness in household spending appears to be more persistent than it forecast," National Australia Bank economist Kaixin Owyong said in a note to clients.

"Should the progress in the labour market falter over the next few months, the Bank will likely be forced to cut rates to support households."

Australia's economic growth ground to a near halt in the second half of 2018, official data showed Wednesday, thrusting the issue to the front and centre of an already contentious general election campaign.

Australia's economic growth ground to a near halt in the second half of 2018, official data showed Wednesday, thrusting the issue to the front and centre of an already contentious general election campaign. The figures released by Australia's statistics agency showed growth for October to December at 0.2 per cent, after a 0.3 per cent reading in the previous three months. Conservative Prime Minister Scott Morrison has based his re-election campaign on stewardship of the economy and allegations that a centre-left Labor party government would spell an end to 28 years of continuous growth. The figures showed annual growth last year at 2.3 per cent, but with growth slowing considerably in the second half of the year as consumer spending weakened and storm clouds gathered in the long-booming housing market. Morrison has opened his chequebook ahead of the election, which is expected in May, announcing funding for a slew of community programmes. That appears to have been just enough to stop growth from grinding to a complete halt. Public expenditure jumped by 1.8 per cent for the period and contributed 0.3 percentage points to GDP growth, while household consumption came in at a soft 0.4 per cent. The central bank on Tuesday kept interested rates at a record low, but markets are increasingly expecting up to two cuts by the end of 2019. "We believe the Bank will be increasingly uncomfortable with the 'growing tension between strong labour market data and softer GDP data' as the weakness in household spending appears to be more persistent than it forecast," National Australia Bank economist Kaixin Owyong said in a note to clients. "Should the progress in the labour market falter over the next few months, the Bank will likely be forced to cut rates to support households."

Australia's economy slows ahead of election