Good news on job creation and inflation in Australia during the first week of July 2011. There are more new jobs on the market and inflation is below its forecast. Let's see for how long.
Australia's economy continued to leave its Western rivals in the dust last week. Job creation rose at its fastest rate in 3 years last month according to the Australian Bureau of Statistics, rising 23.4k in June against forecasts of 15.0k. This adds additional polish to Australia's already sterling labour market, boasting among the lowest unemployment rates in the first world.
Furthermore, Reserve Bank of Australia Governor Glen Stevens also came out with good news last week, telling journalists that inflation isn't rising at the forecast rate. This is in large part because of Australia's two-speed economy.
Though Australia continues to ride the crest of the biggest commodities boom in the nation's history, a slowdown in the global outlook has caused conditions in manufacturing to decline. This is in fact a good thing, because it means Stevens doesn't have to increase interest rates, which might have inhibited exports.
Looking ahead, surging prices in oil and commodities could continue hurting industrial production in the near future. This could exacerbate poor conditions in Australia's manufacturing sector. However, so long as Chinese demand for commodities remains strong, this isn't really a problem.