Petrol prices: According to the Australian Institute of Petroleum, the national average price of unleaded
petrol remained unchanged at 119.4 cents a litre last week.

Adelaide & Brisbane pump prices: Adelaide’s unleaded pump prices are near 4-month highs averaging
$1.40 a litre today, up by 33 cents a litre from the lows of the most recent discounting cycle on July 3. And Brisbane’s unleaded petrol prices are averaging $1.42 a litre today, up by 30 cents a litre from the lows of the most recent retail price cycle on June 25, according to real-time fuel app MotorMouth.

Job advertisements: ANZ job advertisements rose by a record 42 per cent in June to 89,252 available
positions. But ads are still down by 44.6 per cent from a year ago. Ads fell by 0.3 per cent in May following a record 53.7 per cent decline in April.

Inflation gauge: The Melbourne Institute’s headline inflation gauge rose by 0.6 per cent in June – the
biggest lift in 3½ years (since January 2017) – following a record 1.2 per cent decline in May. Headline inflation is up 0.7 per cent over the year. And the Reserve Bank’s preferred underlying inflation measure – the trimmed mean gauge – rose by 0.5 per cent to be up 0.9 per cent on the year.

Movements in the petrol price can affect consumer spending, and in turn, prospects for retailers. The job advertisements data is a leading indicator of the job market and therefore important for consumer-focussed stocks and companies such as SEEK. The inflation gauge estimates month-to-month price movements for a wide-ranging basket of goods and services.

What does it all mean?

Adelaide’s unleaded petrol prices are averaging $1.40 a litre today, up 33 cents from the lows of the most recent discounting cycle on July 3, according to real-time fuel app MotorMouth. Pump prices are around $1.45 a litre in beachside suburbs like West Beach, Glenelg and Brighton – back at levels prior to the virus outbreak in midMarch.

And Brisbane’s unleaded petrol prices are averaging $1.42 a litre today, up by 30 cents a litre from the lows of the most recent retail price cycle on June 25, according to MotorMouth.

The timing isn’t ideal as the South Australian and Queensland school holidays are both underway with many families heading off on regional road trips due to virus state border closures and limited interstate airline travel. With petrol prices at the most expensive phase of the cycle motorists should avoid filling up their tanks if possible.

Sydney and Melbourne drivers, however, are enjoying much lower unleaded petrol prices – averaging around $1.10 a litre. Motorists should fill up this week – at the bottom of the current cycle – as prices may begin to lift next week.

The rebound in Aussie job ads in June is certainly encouraging with available positions lifting off record low levels in May as the economy reopens. The improvement in job hiring intentions comes after recruitment website SEEK announced a 39.7 per cent lift in job vacancies in May.

What do the reports and figures show?

Petrol prices

According to the Australian Institute of Petroleum, the national average price of unleaded petrol remained unchanged at 119.4 cents a litre last week. The metropolitan price was steady at 119.3 cents a litre, but the regional price was down by just 0.1 cents to 119.5 cents a litre.

Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 5.5 cents to 114.6 c/l), Melbourne (down by 6.2 cents to 112.5 c/l), Brisbane (up by 21.4 cents to 136.2 c/l), Adelaide (down by 13.9 cents to 115.2 c/l), Perth (up by 1.7 cents to 120.4 c/l), Darwin (up by 1.2 cents to 119.1 c/l), Canberra (up by 0.2 cents to 118.5 c/l) and Hobart (up by 0.8 cents at 123.1 c/l).

The smoothed gross retail margin (2-month rolling average) for unleaded petrol rose marginally from 15.32 cents to 15.34 cents in the past week (24-month average: 14.2 cents a litre).

The national average diesel petrol price rose by 0.4 cents to 119.8 cents a litre over the past week. The metropolitan price also rose by 0.4 cents to 117.9 cents a litre and the regional price was up by 0.4 cents to 121.4 cents a litre.

Last week the national average wholesale unleaded petrol price (terminal gate or TGP) was down by 0.8
cents to 104.7 cents per litre. Today, the average unleaded TGP stands at 104.1 cents a litre, down by 1.9 cents over the week. The terminal gate diesel price stands at 105.8 cents a litre, down by 0.9 cents over the week.

MotorMouth records the following average retail prices for unleaded fuel in capital cities today: Sydney 111.3c; Melbourne 110.2c; Brisbane 141.7c; Adelaide 140c; Perth 109.5c; Canberra 118.5c; Darwin 119.1c; Hobart 123.5c.

Last week the key Singapore gasoline price rose by US$2.20 a barrel or 4.9 per cent to US$47.50 a barrel. In Australian dollar terms, the Singapore gasoline price rose by $2.78 or 4.2 per cent to $68.54 a barrel or 43.11 cents a litre.

Job advertisements – June

ANZ job advertisements rose by a record 42 per cent in June to 89,252 available positions. But ads are still down by 44.6 per cent from a year ago. Ads fell by 0.3 per cent in May following a record 53.7 per cent decline in April.

ANZ said, “ANZ Job Ads rose by a record 42.0 per cent m/m in June, dwarfing the previous record monthly
increase of 17.7 per cent in February 2010. Week-to-week movements were positive as well, showing consistent improvement throughout the month. This is not overly surprising, given that COVID-19 restrictions continued to ease across most of Australia during June.”

Inflation – June
The Melbourne Institute’s headline inflation gauge rose by 0.6 per cent in June – the biggest lift in 3½ years (since January 2017) – following a record 1.2 per cent decline in May. Headline inflation is up 0.7 per cent over the year. And the Reserve Bank’s preferred underlying inflation measure – the trimmed mean gauge – rose by 0.5 per cent to be up 0.9 per cent on the year.

What is the importance of the economic data?

Weekly petrol prices data are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory metropolitan and nonmetropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.

Melbourne Institute developed a monthly inflation indicator to give markets and policy makers a more regular update on inflation trends. Based on the ABS methodology for calculating the quarterly consumer price index, the Melbourne Institute Monthly Inflation Gauge estimates month-to-month price movements for a wide-ranging basket of goods and services across the main capital cities of Australia.

What are the implications for investors?

The re-tightening of virus restrictions across Melbourne presents a downside risk to the nascent job market recovery – especially after Victoria posted the biggest increase in SEEK job ads – up 48.1 per cent – in May.

Deloitte Access Economics now expects Victoria to experience the biggest economic downturn in Australia as the virus crisis escalates with a record 127 new COVID-19 cases recorded overnight. The suburban lockdown in Melbourne may halt the re-opening of the Victorian economy or force the re-closure of some businesses in an effort to contain the virus. The closure of international borders is likely to impact inbound migration and international student numbers, weighing on broader economic activity.

Inflation remains contained with the annual growth rate of both headline and underlying inflation capped below 1 per cent in June. But consumer prices have become increasingly volatile amid virus disruptions with a record fall in headline prices in May followed by the biggest rebound in 3½ years in June.

The crude oil market is range trading at the moment – with the Brent crude price seemingly stuck between $40 and $45 a barrel – as traders assess the potential impact of rising global virus infection rates on crude demand against OPEC+ supply cuts.

Brent crude advanced by 4.3 per cent last week and is near US$43 a barrel today, supported by improving
economic data and tightening US crude inventories. The recent run up in international crude oil prices is feeding through to Aussie pump prices with retail unleaded petrol prices back around $1.40-$1.50 a litre in some regions – levels last seen prior to the virus outbreak in mid-March.

Ryan Felsman, Senior Economist, CommSec