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Clear and Present Danger: Australia to be hit as Chinese economy unravels; The iron ore price will continue to tumble, causing significant issues for Australia
Topic Started: 5 Sep 2014, 03:22 PM (7,331 Views)
miw
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Ned Flanders
5 Sep 2014, 11:06 PM
I think you being dense on purpose. Almost everyone uses iron ore to buy TVs, because we don't manufacture TVs in Australia. We sell iron ore to China, and buy TVs in return.
Actually, I think we buy TVs from vietnam. Even China buys some of its TVs from Vietnam.
The truth will set you free. But first, it will piss you off.
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Ned Flanders
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miw
5 Sep 2014, 11:16 PM
Actually, I think we buy TVs from vietnam. Even China buys some of its TVs from Vietnam.
In either case, we export iron ore and other commodities, and maybe some education services, and we import TVs and the such like. We run a trade deficit and a capital account surplus, which means we are exporting assets also to pay for the TVs.
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miw
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NFP print was 142k, which is a shocker. Looks like interest rate rise estimates will not be brought forward for at least a month. The party continues......

the fact that the household survey came up with unchanged unemployment and the ADP private sector jobs print yesterday was an unexceptionable 204k suggests to me that this might be a bit of a rogue print though. The absence of undue conniption in the premarket trading suggests a lot of other people think likewise.

S&P futures went from about -0.1% to about +0.1%. Gold up about $10, so well done Jimbo.

Quote:
 
Transmission of material in this release is embargoed USDL-14-1642
until 8:30 a.m. (EDT) Friday, September 5, 2014

Technical information:
Household data: (202) 691-6378 * cpsinfo@bls.gov * www.bls.gov/cps
Establishment data: (202) 691-6555 * cesinfo@bls.gov * www.bls.gov/ces

Media contact: (202) 691-5902 * PressOffice@bls.gov


THE EMPLOYMENT SITUATION -- AUGUST 2014


Total nonfarm payroll employment increased by 142,000 in August, and the
unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor
Statistics reported today. Job gains occurred in professional and business
services and in health care.

Household Survey Data

In August, both the unemployment rate (6.1 percent) and the number of unemployed
persons (9.6 million) changed little. Over the year, the unemployment rate and
the number of unemployed persons were down by 1.1 percentage points and 1.7 million,
respectively. (See table A-1.)

Among the major worker groups, the unemployment rates in August showed little or
no change for adult men (5.7 percent), adult women (5.7 percent), teenagers (19.6
percent), whites (5.3 percent), blacks (11.4 percent), and Hispanics (7.5 percent).
The jobless rate for Asians was 4.5 percent (not seasonally adjusted), little
changed from a year earlier. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more) declined
by 192,000 to 3.0 million in August. These individuals accounted for 31.2 percent
of the unemployed. Over the past 12 months, the number of long-term unemployed has
declined by 1.3 million. (See table A-12.)

The civilian labor force participation rate, at 62.8 percent, changed little in
August and has been essentially unchanged since April. In August, the employment-
population ratio was 59.0 percent for the third consecutive month but is up by 0.4
percentage point from a year earlier. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred
to as involuntary part-time workers) was little changed in August at 7.3 million.
These individuals were working part time because their hours had been cut back or
because they were unable to find a full-time job. (See table A-8.)

In August, 2.1 million persons were marginally attached to the labor force, down
by 201,000 from a year earlier. (The data are not seasonally adjusted.) These
individuals were not in the labor force, wanted and were available for work, and
had looked for a job sometime in the prior 12 months. They were not counted as
unemployed because they had not searched for work in the 4 weeks preceding the
survey. (See table A-16.)

Among the marginally attached, there were 775,000 discouraged workers in August,
little changed from a year earlier. (The data are not seasonally adjusted.)
Discouraged workers are persons not currently looking for work because they
believe no jobs are available for them. The remaining 1.4 million persons
marginally attached to the labor force in August had not searched for work
for reasons such as school attendance or family responsibilities. (See
table A-16.)

Establishment Survey Data

Total nonfarm payroll employment increased by 142,000 in August, compared with
an average monthly gain of 212,000 over the prior 12 months. In August, job
growth occurred in professional and business services and in health care. (See
table B-1.)

Professional and business services added 47,000 jobs in August and has added
639,000 over the past year. In August, management of companies and enterprises
gained 8,000 jobs. Employment continued to trend up over the month in administrative
and support services (+23,000), architectural and engineering services (+3,000),
and in management and technical consulting services (+3,000).

Employment in health care increased by 34,000 in August. Within the industry,
offices of physicians and hospitals added 8,000 jobs and 7,000 jobs, respectively.
Social assistance employment continued to trend up over the month (+9,000) and has
expanded by 104,000 over the year.

Within leisure and hospitality, employment in food services and drinking places
continued to trend up in August (+22,000) and is up by 289,000 over the year.

Construction employment continued to trend up in August (+20,000). This is in line
with its average monthly job gain of 18,000 over the prior 12 months. In August,
employment trended up in specialty trade contractors (+12,000) and construction of
buildings (+7,000).

Manufacturing employment was unchanged in August, following an increase of 28,000
in July. Motor vehicles and parts lost 5,000 jobs in August, after adding 13,000
jobs in July. Auto manufacturers laid off fewer workers than usual for factory
retooling in July, and fewer workers than usual were recalled in August. Elsewhere
in manufacturing, there were job gains in August in computer and peripheral
equipment (+3,000) and in nonmetallic mineral products (+3,000), and job losses in
electronic instruments (-2,000).

In August, retail trade employment was little changed (-8,000). Food and beverage
stores lost 17,000 jobs; this industry was impacted by employment disruptions at a
grocery store chain in New England. Elsewhere in retail trade, automobile dealers
added 5,000 jobs.

Employment in other major industries, including mining and logging, wholesale trade,
transportation and warehousing, information, financial activities, and government,
showed little change over the month.

In August, the average workweek for all employees on private nonfarm payrolls was
34.5 hours for the sixth consecutive month. The manufacturing workweek edged up by
0.1 hour to 41.0 hours, and overtime was unchanged at 3.4 hours. The average
workweek for production and nonsupervisory employees on private nonfarm payrolls
was 33.7 hours for the sixth consecutive month. (See tables B-2 and B-7.)

Average hourly earnings for all employees on private nonfarm payrolls rose by 6
cents in August to $24.53. Over the year, average hourly earnings have risen by
2.1 percent. In August, average hourly earnings of private-sector production and
nonsupervisory employees rose by 6 cents to $20.68. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for June was revised from +298,000
to +267,000, and the change for July was revised from +209,000 to +212,000. With
these revisions, employment gains in June and July combined were 28,000 less than
previously reported.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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b_b
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peter fraser
5 Sep 2014, 10:28 PM
OK but to manage the end of the capex we need to allow our dollar to fall and reduce interest rates. How do we achieve that without causing a housing boom?
You have been reading too much macro business peter. Why do we want a lower exchange rate. How is it in the national interest to pay more for imports.

Lower interest rates? How will lower interest rates encourage more activity than we already have. Housing starts already at capacity.

This country needs infrastructure and a national population growth plan. There is plenty of work available to offset the mining capex cycle. Only ignorance holds us back.


Ned Flanders
5 Sep 2014, 11:06 PM
I think you being dense on purpose. Almost everyone uses iron ore to buy TVs, because we don't manufacture TVs in Australia. We sell iron ore to China, and buy TVs in return.
Bhp sells iron ore to china. Bhp earns foreign currency - they then buy aud pushing up the exchange rate hurting other export industries. The aud is sent to some select shareholders - mainly foreign instos. That's it. No TV involved. And for the record, we were buying TV's well before the iron ore boom.

I am not being dense. You have all accepted mainstream commentary about iron ore prices "save" Australia. It sounds like this is the first time you have ever heard anyone question this concept. And of course the best argument I have heard so far in return is "it's true because it's true" :lol

Priceless.
miw
5 Sep 2014, 11:44 PM
NFP print was 142k, which is a shocker. Looks like interest rate rise estimates will not be brought forward for at least a month. The party continues......

the fact that the household survey came up with unchanged unemployment and the ADP private sector jobs print yesterday was an unexceptionable 204k suggests to me that this might be a bit of a rogue print though. The absence of undue conniption in the premarket trading suggests a lot of other people think likewise.

S&P futures went from about -0.1% to about +0.1%. Gold up about $10, so well done Jimbo.

What a shock. :re:

Jobs were pulled forward in first six months due to expiring benefits.

Shit result for labour - great for capital. Dow futures now up.
Edited by b_b, 5 Sep 2014, 11:59 PM.
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peter fraser
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b_b
5 Sep 2014, 11:46 PM
You have been reading too much macro business peter. Why do we want a lower exchange rate. How is it in the national interest to pay more for imports.

Lower interest rates? How will lower interest rates encourage more activity than we already have. Housing starts already at capacity.

This country needs infrastructure and a national population growth plan. There is plenty of work available to offset the mining capex cycle. Only ignorance holds us back.
Not wanting to get into a discussion on politics, but Abbot and the team don't seem to be nation builders - anything but in fact.
Due to what I expect to be a continuation of lacklustre policy initiatives we need an alternative plan for job creation. I know that you have strong ideas on this subject, but within the constraints of the political reality we have to live with, what else is there other than lowering rates and looking for a lift in some non-mining industries.
Any expressed market opinion is my own and is not to be taken as financial advice
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b_b
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peter fraser
6 Sep 2014, 12:03 AM
Not wanting to get into a discussion on politics, but Abbot and the team don't seem to be nation builders - anything but in fact.
Due to what I expect to be a continuation of lacklustre policy initiatives we need an alternative plan for job creation. I know that you have strong ideas on this subject, but within the constraints of the political reality we have to live with, what else is there other than lowering rates and looking for a lift in some non-mining industries.
What's missing is private investment. Companies invest in anticipation of, or response to demand.

No boardroom invests because of low interest rates. They need customers.

Just more monetarist / Neo Keynsian rubbish from MB loonies who have never had to work in the real economy - think it all comes out of a text book.

I agree with what you say about the political realities. Does not stop me getting frustrated.
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Ned Flanders
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b_b
5 Sep 2014, 11:46 PM
Bhp sells iron ore to china. Bhp earns foreign currency - they then buy aud pushing up the exchange rate hurting other export industries.
Well, at least you got that part right. You forgot to mention that pushing up the AUD lowers the price of TVs. Oh, and resource taxes flow to governments, who can lower income taxes as a result, giving tax payers more income.
Quote:
 
The aud is sent to some select shareholders - mainly foreign instos. That's it. No TV involved. And for the record, we were buying TV's well before the iron ore boom.

Are you really this thick?
Quote:
 
I am not being dense. You have all accepted mainstream commentary about iron ore prices "save" Australia.

Wrong again. High iron ore prices have been terrible for Australia. For one, we hollowed out more than half of our manufacturing industry as a result.
Quote:
 
It sounds like this is the first time you have ever heard anyone question this concept. And of course the best argument I have heard so far in return is "it's true because it's true" :lol

It's not true because it is true, it is true because it has already happened. Australians are lazy fuckers always looking for the quick and easy score without having to do any work for it, like the housing bulls on this forum and middle class socialists like yourself who expect the fruits of other people's ingenuity and risk-taking be distributed to you without having to do anything in return for it.

Hey, China wants to buy dirt! Let's drop everything and sell them some dirt! And let's party and buy expensive houses and have a group congratulatory wank fest at BBQs about how super clever we must be because the market price for our house went up this year! MAAAATE, beats workin for a livin!
------------------------------
" ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility."
- Alan Glynn
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b_b
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Ned Flanders
6 Sep 2014, 12:17 AM
Well, at least you got that part right. You forgot to mention that pushing up the AUD lowers the price of TVs. Oh, and resource taxes flow to governments, who can lower income taxes as a result, giving tax payers more income.
Yes - higher exchange rate is good for imports - I agree. You may have noticed a lower iron ore prices has not resulted in a lower AUD. But you know, evidence and data can be annoying so we will ignore that. And for the record, currency is irrelevant when discussing the terms of trade.

And the government can cut taxes anytime. The Australian government is not revenue constrained. Nothing to do with Iron ore prices.
Quote:
 
Are you really this thick?

You sound angry. I understand. For the first time in your life you have to think about this, and you are probably embarrassed you have swallowed this crap hook line and sinker.
Quote:
 
Wrong again. High iron ore prices have been terrible for Australia. For one, we hollowed out more than half of our manufacturing industry as a result.

I get it - high iron ore prices are bad. Low iron ore prices are bad. Welcome to bear logic APF style. :re:
Quote:
 
It's not true because it is true, it is true because it has already happened. Australians are lazy fuckers always looking for the quick and easy score without having to do any work for it, like the housing bulls on this forum and middle class socialists like yourself who expect the fruits of other people's ingenuity and risk-taking be distributed to you without having to do anything in return for it.

More impotent rage. :lol :lol
You should be upset. You have been sold some dodgy bear porn about the DECLINING TERMS OF TRADE AND INCOME SHOCK. :lol
Quote:
 
Hey, China wants to buy dirt! Let's drop everything and sell them some dirt! And let's party and buy expensive houses and have a group congratulatory wank fest at BBQs about how super clever we must be because the market price for our house went up this year! MAAAATE, beats workin for a livin!

Iron ore or the mining industry has had no impact on the vast majority of house prices. Like your Macrobusiness mates you are looking the blame something for getting your housing call wrong. "China buys iron ore and yada, yada, yada, high house prices and stuff."

Classic.

In reality, there is this really ugly building in martin place Sydney which....oh don't worry about it.
Edited by b_b, 6 Sep 2014, 12:44 AM.
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Steve99
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peter fraser
6 Sep 2014, 12:03 AM
Not wanting to get into a discussion on politics, but Abbot and the team don't seem to be nation builders - anything but in fact.
Due to what I expect to be a continuation of lacklustre policy initiatives we need an alternative plan for job creation. I know that you have strong ideas on this subject, but within the constraints of the political reality we have to live with, what else is there other than lowering rates and looking for a lift in some non-mining industries.
Im sure that is plan 'A' which involves the expansion of the house 'price' industry. Modern politicians see inflation growth as gdp growth, especially if it buys votes.
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Ex BP Golly
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b_b
5 Sep 2014, 09:46 PM
Obviously not dumbed down enough - you don't even understand it. Perhaps you can explain in detail how a $20 drop in iron ore affects the wages of the local pharmacist ?

Agree . As per my initial post, we have the manages the end of the capex cycle. Whether the iron ore price is $30 or $130 does nit change that.

So I reiterate my initial comment. Unless you own mining shares the fall in iron ore price matters little to Australia.

IMO probably very little.
Not at all. Most of the 30% ave wage increase delivered through mining was done by capacity destroying measures such as wage increases not linked to productivity gains, tax breaks, and the welfarisation on the average family.

This was the dividend of your invisible mining shares as an Aussie.

now the goose has stopped laying its lovely golden eggs, govt is raising taxes ( :wak: the carbon tax is removed so energy doesnt go up, but government is raising the price of energy anyway :wak: ) and pressure is starting to be placed on wages and conditions; liberals pushing to lower young people's wages.

After a decade plus of being treated like we are all living in a sheltered workshop, every little thing government does to try to lift this nations productivity will be met with whinging whining people decrying the loss of a handout.

you cant see all of this?

Although handouts continue. Unless you are business directly involved in energy manufacturing you don't have to hand back the carbon tax load you had factored into your prices.

;) That should help Qantas a bit :to:

On handouts- the Doctors are really argueing that the $7 co-contribution tax should be dropped with the $7 per visit still raised but going directly in their pocket.

What a sick f nation we have become!
Edited by Ex BP Golly, 6 Sep 2014, 09:27 AM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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