Australian jobs are slowly evaporating out of nowhere. Between September 26 and October 03, the number of payroll jobs went down by 0.7 percent. This is significant because this is the first week where the official statistics would be able to capture the effect of the new JobKeeper system.
Aside from JobKeeper going low, it is also hard for businesses to qualify which means a lot of business are cut off and support for employees are gone.
This is likely to be happening while Victoria fixes its virus situation and worsened by the amount of support the government provides.
In the preliminary data from the Australian Bureau of Statistics, the biggest fall in jobs was among small businesses. These are the ones who are most likely have qualified for JobKeeper.
The government support for the economy had to be removed at some point, but doing it now might well strike it too soon.
The Flow-on Effects
As Christmas season is approaching, retailers will be hoping to let loose a little after a year of restrictions. Without the loosing of restrictions, small retailers are in the brink of disaster. They will need a strong Christmas period to survive 2021.
The Reserve Bank of Australia hopes the Aussies to spend up on Christmas season. The RBA has been tracking all the money that got pumped into the economy and found out that over the last six months, the Aussies have been doing a lot of saving.
That could mean that on December, a lot of spending may happen which will contribute to Australia’s economy growth.
The RBA Governor puts it like this: “It is entirely possible that as restrictions ease, people will choose to draw on their accumulated buffers to sustain and increase their spending.”
That is possible because all-throughout the year, there were a lot of holidays, summer vacations and buying presents were not seen. The massive spending in December might be the hope for most small retailers to continue on surviving.
In the daily charts of AUD/USD, the Aussie dollar gained against the dollar early Friday morning in Sydney Session.
The risk-sensitive Australian dollar inched 0.1% higher early on Friday and is about 0.7% firmer this week, with further gains capped by a growing expectation that the Reserve Bank of Australia will cut rates when it meets in November.
As what we can see in the chart, the pair is still inside the area of support and resistance. With the upcoming debates of the U.S. Presidential Election between Joe Biden and President Trump due today, the AUD is gaining due to the volatility this debate brings for the U.S. dollar.
Although investors are still uncertain of the outcome, talks of a democratic win by Joe Biden will push the dollar lower and AUD may gain from this position. As the U.S. Election in November nears, traders and investors are still uncertain on their positions and some are staying on the sidelines trying to gauge the sentiment of the market.
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