Unemployment rises; World Cup hits earnings; breakthrough melanoma treatment

Unemployment rises; World Cup hits earnings; breakthrough melanoma treatment

News in brief

The Australian dollar is trading back above 71 US cents, which is closer to the long run average for the currency against the greenback. Oil prices have been trending up as the stalemate in the Strait of Hormuz continues. Brent is fetching $SU92 a barrel. And gold prices have also been pushing higher, helped along by the US Treasury unexpectedly saying it was buying back government debt. That pushed the price of the precious metal back to $US4,500 an ounce.

 

The federal government yesterday pushed through its News Bargaining Incentive legislation, meaning Google, Meta, TikTok and Microsoft’s LinkedIn will be charged a 2.5 per cent levy on their digital advertising revenue unless they strike at least eight individual deals with local media players.

 

Question time in parliament yesterday was dominated by federal government debt. It pushed past $1 trillion yesterday for the first time.

 

Super Retail Group, owner of Rebel Sports, enjoyed the World Cup more than most with sales for football supporters gear surging during the June quarter, saving the company for what would otherwise have been an ordinary June quarter.

 

US vaccine-maker Moderna has reported successful trial results for an experimental skin cancer therapy, sending its share price up threefold. The experimental therapy, jointly developed with Merck, would be unprecedented in cancer treatment, providing a custom-made vaccine for each patient depending on their specific tumours. Analysts expect US regulatory approval next year.

Fear-o-meter

Cotality on final auction clearance rates last week:

 

A total of 1,276 auctions were held across the combined capital cities last week, 7.7% fewer than the previous week and 33.6% fewer than a year earlier.

 

The weighted average final clearance rate was 48.9%, down 2.5 percentage points from the previous week’s 12-week high of 51.4%. This was 20.9 percentage points below the 69.8% recorded a year ago and points to a subdued market, with fewer than half of reported auctions resulting in a sale.

 

Melbourne hosted 588 auctions last week, down 10.8%, while its clearance rate eased by 3.9 percentage points to 52.9%. Sydney’s auction volume changed only slightly but its clearance rate fell more sharply, declining 4.4 percentage points to 47.1%. Both cities remain well below their year-ago levels: in the equivalent week last year, Melbourne held 932 auctions with a clearance rate of 69.1%, while Sydney held 705 auctions with its clearance rate finalising at roughly 71.7%.

 

Among the smaller capitals, Canberra had the highest clearance rate last week, at 53.5%, up 6.7 percentage points, albeit from only 43 auctions. Adelaide’s clearance rate improved by 4.4 percentage points to 51.2% across 84 auctions.

 

Brisbane’s clearance rate was relatively stable at 35.9%, up only 0.5 percentage points, but remained the weakest among the larger markets, with 142 auctions held. Perth’s clearance rate rose from 22.2% to 33.3%, although the result was based on only nine auctions, limiting its significance. 

Fear & Greed Q+A today

On the remarkable story behind Australian tech company Atlassian - the growth of the business, the partnership between Scott Farquhar and Mike Cannon-Brookes, and when the cracks in their working relationship started to emerge:

 

“I think you can trace it back to when the really big money starts coming in, Sean. So, you know, they start the company in about 2002, fresh out of university. The first decade is amazing, right? They’re very profitable very quickly. They’re building this incredible story, this incredible culture of a company. And when they list on the Nasdaq in 2015, it’s record setting, right? Suddenly the company is worth tens of billions of dollars and the money starts coming in when they start selling off little slices of their shareholdings every day. They’re selling a million dollars worth of shares every day.”

The unemployment rate rose to 4.5 per cent last month, the equal highest level in five years, on the back of a loss of nearly 16,000 jobs. The result follows a bumper June reading, and a pullback was somewhat expected. But yesterday’s figures from the Australian Bureau of Statistics were weaker than most economists had forecast.

 

There was a fall in the participation rate – the number of people looking for a job – and the number of hours worked in all jobs, and an increase in the underemployment rate, which measures the share of people with jobs, who would like to work more.

 

Over the last six months, jobs growth has average 18,000 per month. The Reserve Bank and Federal Treasury are at odds over unemployment. The central bank has forecast an unemployment rate of 4.8 per cent in the middle of 2028. Treasury thinks it will peak around 4.5 per cent. In any case, both forecasts now look at risk of being overly optimistic.

Greed-o-meter

State / territory	Unemployment rate %
Victoria	5.1
Tasmania	5.1
Northern Territory	4.7
Western Australia	4.3
New South Wales	4.2
Queensland	4.2
South Australia	4.2
Australian Capital Territory	4.0
Australia	4.5

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Australia's trend unemployment rate is 4.5 per cent, but the jobs market looks quite different depending on where you live. Victoria and Tasmania have the highest unemployment rates at 5.1 per cent, followed by the Northern Territory at 4.7 per cent, while the ACT has the lowest at 4.0 per cent.

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Source: ABS