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HomeWorld NewsGrowth for the Aussie economy, US adds more jobs

Growth for the Aussie economy, US adds more jobs

UK Spring Budget published, Canada maintains rates

UK’s Budget: growth & tax cuts. Australian GDP up 0.2%, imports down 3.4%. US adds 140K jobs, pay rises 5.1%. Canada’s Bank holds rates.

Australian Domestic Product Growth

Australia’s GDP rose by 0.2%, buoyed by government spending and private business investments. However, domestic demand slowed due to reduced household discretionary spending and a slowdown in investments after several quarters of growth. Nominal GDP increased by 1.4%, with the GDP implicit price deflator rising by 1.2%, primarily fueled by higher export prices, particularly for iron ore and coal. Import prices also rose by 0.8% due to a weaker Australian dollar.

Household consumption saw a modest increase, while government consumption rose by 0.6% year-on-year. However, both private and public investment declined, contributing negatively to GDP growth. Additionally, changes in inventories detracted from growth, mainly driven by declines in mining and wholesale trade inventories.

Surplus Growth due to smaller imports

On the trade front, imports fell by 3.4%, driven by decreases in consumption and capital goods imports, while exports experienced a slight decline of 0.3%, mainly due to a fall in exports of goods, offset partially by an increase in exports of services.

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UK Spring 2024 Budget

The UK economy is on a positive trajectory, with inflation expected to reach target levels in the next quarter. Wages have consistently outpaced prices, and the country has shown better yield compared to its European counterparts. The Spring 2024 Budget emphasizes long-term output, with significant tax cuts benefiting both workers and businesses.

Over £900 annually will be returned to the average worker’s pocket, and tax cuts for self-employed individuals are also implemented. Investments in public services, particularly the NHS, are prioritized, along with measures to boost productivity through technological advancements. Additionally, freezes on fuel and alcohol duties aim to provide relief to consumers.

US Employment Report

According to the ADP National Employment Report, the US private sector added 140,000 jobs in February, with annual pay rising by 5.1%. While employment growth remained steady, pay gains for job-changers accelerated to 7.6%, the first increase in over a year.

Growth benefits job change

However, pay gains for job-stayers decelerated to 5.1%, the smallest gain since August 2021. This report provides insights into the private-sector labor market based on actual payroll data, offering a near real-time measure of employment trends in the US.

Bank of Canada Monetary Policy Update

The Bank of Canada has maintained its target for the overnight rate at 5%, with a policy of quantitative tightening. Globally, economic growth slowed in the fourth quarter, with the US experiencing robust but slightly slowed growth, while the Eurozone showed flat growth after a contraction.

In Canada, GDP growth exceeded expectations in the fourth quarter, driven primarily by exports, although business investments declined. Inflation eased to 2.9% in January, but underlying inflation pressures persist. The Bank remains focused on restoring price stability, monitoring inflation, demand-supply dynamics, wage growth, and corporate pricing behavior.

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