Australian December Services PMI 47.1 (prior 46.0)

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Australian December Services PMI 47.1 (prior 46.0)

Judo Bank / S&P Global November Services PMI comes in at 47.1, improved but still in contraction

• November was 46.0

Composite is 46.9

• November's was 46.2

From the analysis in the report, on inflation and employment:

• "Employment growth has continued to be at odds with a
  slowing economy through December. The employment index
  rose to 51.9 over the month, driven by a significant pickup
  in services sector employment. The index has remained
  comfortably in positive territory through 2023, and with official
  readings for job vacancies and advertisements remaining
  well above pre-pandemic trends, strong employment growth
  will likely continue through early 2024.
  
• "Input prices softened through December, partially relieving
  some businesses of elevated margin pressure. While input
  price pressures eased, the current index levels for both input
  and output prices remain well above pre-pandemic levels
  and are consistent with sticky inflation above the RBA's target
  range of 2-3%. Index readings for the services sector confirm
  official data on inflation and service inflation's sticky nature.

'Sticky inflation' argues for the Reserve Bank of Australia to be higher for longer. I posted earlier this week on:

• Bank of America predicts no rate cut from the Reserve Bank of Australia until 2025

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Earlier this week we had the December manufacturing PMI:

• Australia final December manufacturing PMI 47.6 (prior 47.7)

The flash readings from December are here:

• Australian Preliminary PMIs for December improve but remain in contraction

                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: Australian December Services PMI 47.1 (prior 46.0)

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