Macroeconomics brief

The Treasury is optimistic about the continued role of China in fostering the long Australian expansion. The Treasurer Peter Costello warns of the consequences of the worst drought ever with the edge disappearing from commodity prices. Also of interest is his linkage of adverse climatic conditions in the ‘driest continent’ with Greenhouse problems. Meanwhile, the RBA’s new boss Glenn Stevens believes that despite a slowing in the US economy and less pressure from petrol prices, inflation remains a problem which makes a further interest rate hike this year more likely than not.

The complete Stevens address is here – it is an excellent summary of factors bearing on the Australian economy. The usual RBA line that continued prosperity is impossible without a low inflation focus is reinstated.

Later today the return in the unemployment rate to a 30-year low of 4.8% was announced. I was interested in the (seasonally adjusted) state and territory unemployment breakdowns:

Tasmania: up to 6.8%.
Queensland: Up to 4.8%.
NSW: Fallen to 5.5%.
Northern Territory: Fallen to 3.6%.
Western Australia: Fallen to 3.5%.
South Australia: Fallen to 4.7 %.
ACT: Unchanged at 2.7%.
Victoria: Currently 4.7%.

Details from ABS are here.