Saturday, October 1, 2022

Petrol prices hike despite tax cuts

The national average for petrol prices rose 9.3 cents to 178.2 cents a liter last week, the Australian Institute of Petroleum said, a second consecutive weekly increase, though still comfortably below the $2-mark at this level.

Ryan Feldsman, senior economist at Commonwealth Securities, said international crude oil prices – which have the biggest influence on petrol prices – have been boosted by fears that the Ukrainian war will continue to disrupt supplies.

“While the COVID-19 lockdown in China may weigh on crude oil demand, an increase in support prices likely means that Germany will join other EU member states in sanctions on Russian oil,” he said.

The dissemination of the new data also showed a slowing of monthly house price growth, which has not been seen since October 2020.

The CoreLogic National Home Value Index rose just 0.6 percent in April, slowing the annual rate to 16.7 percent.

Economists say that if they are correct in expecting the Reserve Bank of Australia to start raising the cash rate at Tuesday’s monthly board meeting, home prices run the risk of a retreat in the coming months.

Financial markets are fully priced in for a 0.15 percent increase in the cash rate after 0.25% annual inflation to 5.1 percent.

The projected marginal increase in the cash rate is expected to increase by 0.25 per cent in subsequent months from a record low of 0.1 per cent.

“When unemployment is at four percent and inflation is over five percent, there’s no point in having a near-zero cash rate,” said Shane Oliver, AMP’s chief economist.

“Experience from the late 1960s and 1970s tells us that the longer high inflation persisted, the higher the inflation expectations, making it even more difficult to bring inflation down again without engineering a recession.”

While rising interest rates may have had an impact on the election campaign, as they did in 2007 when then-Liberal leader John Howard lost power, unemployment rates were still falling as part of Prime Minister Scott Morrison’s economic credentials. Is.

While job advertising declined slightly in April, it still pointed to strong job growth and a further decline in the unemployment rate in the coming months.

The ANZ job ad chain saw a 0.5 percent drop in April, but it was still 26.3 percent higher than a year ago and 57.3 percent above pre-COVID-19 levels.

“We expect solid job gains in the coming months from strong labor demand,” said David Plank, ANZ head of Australian economics.

“We see the unemployment rate falling below four percent in the second half of 2022, which should reinforce the momentum for higher wage growth.”

The March federal budget forecasts the unemployment rate to fall to 3.75 percent in the coming months, the lowest in nearly 50 years.

Industries such as manufacturing are being constrained by skill shortages as well as input price pressures and rising wage costs, although the sector is still growing.

The Australian Industry Group’s performance of the manufacturing index rose 2.8 points to 58.5 in April, its fastest pace since July 2015.

It was the third consecutive month it was above the key 50-mark, which separates growth from contraction.

AI Group Chief Executive Officer Ines Willocks said, “New orders increased further in April and many businesses are facing capacity constraints and difficulties securing input and staff, with orders to fill in the coming months.” The pressure will continue.”

Nation World News Desk
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