Job ads hit 13-year high. Record Sydney petrol prices.

Job ads; Inflation gauge; Energy market update

Job advertisements (as tracked by ANZ) rose by 7.4 per cent in November to a 13-year high of 222,093 available positions. Ads are up 52.5 per cent on a year ago and 44.2 per cent above pre-pandemic levels.

The Melbourne Institute monthly inflation gauge rose by 0.3 per cent in November to be up 3.1 per cent on the year. The ‘underlying’ or trimmed mean measure also lifted 0.3 per cent to be up 2.6 per cent on the year.

The Australian Institute of Petroleum reported the national average unleaded petrol price eased by 2.5 cents last week to 167.9 cents a litre, down from a record high. But pump prices hit all-time highs in Sydney and Hobart.

What does it mean?

• Australia’s economy is rebounding strongly from recent Delta lockdowns in the south-east. A robust recovery in labour demand is evident in high-frequency job ads and vacancies data. In fact, ANZ’s measure of job ads jumped by 7.4 per cent in November after October’s 7.5 per cent gain. Available positions hit 13-year highs of 222,093 by the end of November to be 44.2 per cent above pre-pandemic levels. ANZ economists reported that recruitment activity surged by 16.9 per cent in NSW, 15.2 per cent in Victoria and 12.5 per cent in the ACT in November.

• The Reserve Bank has been using ultra-accommodative emergency monetary policy measures during the pandemic to try and drive down the unemployment rate to near 4 per cent – from 5.2 per cent in October – to stoke wage growth and help return inflation “sustainably” to near the mid-point of its 2-3 per cent target range.

• With the Australian Bureau of Statistics (ABS) releasing the Consumer Price Index (CPI) quarterly, the Melbourne Institute’s monthly inflation gauge has taken on even greater importance for investors and economists monitoring growing price pressures in the Aussie economy. In November, the headline inflation gauge rose by 0.3 per cent to be up 3.1 per cent on the year (prior: up 3.1 per cent). And the ‘underlying’ or trimmed mean measure also lifted by 0.3 per cent to be up 2.6 per cent on the year (prior: up 2.8 per cent). The stabilisation of annual inflation growth rates at elevated levels in the face of supply-side constraints, implies that it may still take some time for the economic recovery to translate into faster price gains.

• Global oil prices remain under pressure on concerns that rising Covid-19 cases and the emergence of the Omicron virus variant could reduce global crude demand. On the supply-side, OPEC and its allies (OPEC+) decided last Thursday to proceed with a scheduled 400,000 barrels per day increase in production for January 2022. That said, crude prices climbed more than US$2 a barrel in early trade on Friday after OPEC+ said it could review its policy to hike output if demand weakened due to the threat of renewed virus outbreaks and government travel restrictions.

• The producer alliance continues to monitor global oil markets as the US and Iran return to the negotiating table, resuming talks on a nuclear deal. While an accord appears some way off, a potential deal could increase Iranian crude supply and exports. Also, the US could still boost production further after the Biden Administration recently tapped the Strategic Petroleum Reserve (SPR) to lower domestic fuel costs.

• Last week the Brent crude oil price fell by US$2.84 or 3.9 per cent to US$69.88 a barrel. And the Nymex crude oil price dipped by US$1.89 or 2.8 per cent to US$66.26 a barrel, its sixth straight weekly decline and longest stretch of weekly losses since 2018. US oil drillers kept the number of oil rigs unchanged last week, after previously adding rigs for five consecutive weeks to their highest level since April 2020, according to Baker Hughes.

• The fall in international fuel costs is good news for Aussie motorists ahead of summer driving holidays. Refined imported petroleum product costs account for around 47 per cent of the unleaded petrol pump price, according to the Australian Institute of Petroleum (AIP). Last week, the benchmark Singapore gasoline price dipped US$5.30 or 6 per cent to a 12-week low of US$82.60 a barrel. In Aussie dollar terms, the Singapore gasoline price fell by $6.34 – the biggest drop in 8½ months – or 5.2 per cent to $116.73 a barrel or 73.42 cents a litre.

• AIP figures show that the national average wholesale (TGP) petrol price has dropped to 141.9 cents per litre today, the lowest level since September 28. And the national average weekly retail unleaded petrol price has eased from a record high of 170.4 cents a litre (c/l) to 167.9 c/l last week. Already, retail pump prices have eased from record highs in both Brisbane and Melbourne, but motorists should hold-off filling up for now as fuel prices will continue to fall.

• But Sydney is being gripped by a servo price hike with the daily average retail unleaded petrol price hitting a record high 180.3 c/l today, according to real-time fuel app MotorMouth. Motorists should top-up rather than fill up, or shop around for the best deal with prices as high as 191.9 c/l in Sydney’s Inner West.

What do you need to know?

Job advertisements – November

• Job advertisements (as tracked by ANZ) rose by 7.4 per cent in November to a 13-year high of 222,093 available positions. Ads are up 52.5 per cent on a year ago and 44.2 per cent above pre-pandemic levels.

Monthly inflation gauge – November

• ccording to the Melbourne Institute, the monthly inflation gauge rose by 0.3 per cent in November to be up 3.1 per cent on the year, in-line with October’s annual growth rate.

• The ‘underlying’ or trimmed mean inflation measure also rose by 0.3 per cent to be up 2.6 per cent on the year, down from the 2.8 per cent annual pace in October.

Weekly energy market update

• Last week, the Brent crude oil price fell by US$2.84 or 3.9 per cent to US$69.88 a barrel. And the Nymex crude oil price dipped by US$1.89 or 2.8 per cent to US$66.26 a barrel, its sixth straight weekly decline and longest stretch of weekly losses since 2018.

• The benchmark Singapore gasoline price dipped US$5.30 or 6 per cent to a 12-week low of US$82.60 a barrel last week. In Aussie dollar terms, the Singapore gasoline price fell by $6.34 – the biggest drop in 8½ months – or 5.2 per cent to $116.73 a barrel or 73.42 cents a litre.

• According to the Australian Institute of Petroleum the national average unleaded pump price fell by 2.5 cents last week to 167.9 cents a litre (c/l), down from all-time highs. Weekly petrol prices hit record highs in Sydney (173.2 c/l) and Hobart (179.6 c/l). The smoothed gross retail margin rose from 13.1 cents a litre to 14.7 cents a litre last week.

• The national average wholesale (TGP) petrol price fell by 3.4 cents last week to 145.9 cents per litre. Today the TGP price sits at 141.9 cents per litre, down by 6 cents from 147.9 cents a litre in the previous week.

• MotorMouth records the following average retail prices for unleaded fuel today: Sydney 180.3c/l; Melbourne 158.9c/l; Brisbane 168.8c/l; Adelaide 142.4c/l; Perth 164.8c/l; Hobart 179.4c/l; Darwin 169.2c/l and Canberra 170.6c/l.

Published by Ryan Felsman, Senior Economist, CommSec