Japan's manufacturing economy failed to grow for the first timein two and a half years in January as a mounting global tradedownturn took an increasing toll on the country's exporters andpushed business sentiment to its lowest for six years. The stallingof business activity ended the country's longest growth spell for adecade and raises questions over the ability of the economy toweather headwinds in 2019, which look set to include rising globaltrade tensions and a planned sales tax rise.
Flat start to the year
The first piece of economic data for 2019 suggests the Japaneseeconomy started the year on a disappointing note. The NikkeiManufacturing Purchasing Managers' Index (PMI™) fell sharplyfrom 52.6 in December to 50.0 in December according to the flashestimate released on 24th January.
With 50.0 being the neutral level between growth and expansion,January's PMI reading signalled a stagnation of business conditionsduring the month. It was the lowest reading since August 2016.
The headline PMI is a composite indicator based on a variety ofsurvey sub-indices, the analysis of which paints an even gloomierpicture. The PMI output index signalled the first monthly fall infactory production since August 2016, while the new orders indexpointed to the first reduction of new work inflows since September2016.
Data from the monthly Labour Force Survey are released in two stages. The Labour Force, Australia, Detailed - Electronic Delivery (cat. no. 6291.0.55.001) and Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003) are part of the second release, and include detailed data not contained in the Labour Force, Australia (cat. no. 6202.0) product set, which is released one week earlier.
The Labour Force, Australia, Detailed - Electronic Delivery (cat. no. 6291.0.55.001) is released monthly. Labour Force, Australia, Detailed, Quarterly (cat. no. 6291.0.55.003) includes data only collected in February, May, August and November (including industry and occupation).
Since these products are based on the same data as the Labour Force, Australia (cat. no. 6202.0) publication, the 6202.0 Labour Force, Australia Explanatory Notes are relevant to both releases.
NEW LABOUR FORCE SURVEY SAMPLE
As previously highlighted, the ABS is currently phasing in a new sample design. This began with the incoming rotation group in July 2018 and will continue through to February 2019. An information paper titled Information Paper: Labour Force Survey Sample Design, Jul 2018 (cat. no. 6269.0) was released on 30 July 2018 with detailed information on the new sample. As with each regular sample design, the impacts on the data are expected to be minimal and the ABS will monitor the quality of the estimates over the period the sample is phased in.Original link
After extensive deliberations and thorough review of experience to date, the Committee judges that it is appropriate at this time to provide additional information regarding its plans to implement monetary policy over the longer run. Additionally, the Committee is revising its earlier guidance regarding the conditions under which it could adjust the details of its balance sheet normalization program. Accordingly, all participants agreed to the following:
The Committee intends to continue to implement monetary policy in a regime in which an ample supply of reserves ensures that control over the level of the federal funds rate and other short-term interest rates is exercised primarily through the setting of the Federal Reserve's administered rates, and in which active management of the supply of reserves is not required.
The Committee continues to view changes in the target range for the federal funds rate as its primary means of adjusting the stance of monetary policy. The Committee is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments. Moreover, the Committee would be prepared to use its full range of tools, including altering the size and composition of its balance sheet, if future economic conditions were to warrant a more accommodative monetary policy than can be achieved solely by reducing the federal funds rate.
Last Update: January 30, 2019Original link