Amazon goes on a vast hiring spree

Kia ora, 

Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect New Zealand.

I'm David Chaston and this is the International edition from Interest.co.nz.

Today we lead with news that while emerging economies are doing it tough, the main first-world ones are still expanding at a healthy clip.

We get the US non farms payroll report for August this weekend (NZT) and today's pre-cursor ADP Employment Report disappointed. The delta surge is taking the top off their labour market expansion. Analysts expect the official non-farm payrolls report to deliver +750,000 extra jobs. But they had expected the ADP report to deliver +613,000 - but it only delivered +374,000. So those non-farm payrolls estimates are very likely to be downgraded.

However, we should also note that online retail behemoth Amazon said it is currently trying to hire 40,000 corporate and tech roles across the US as well as tens of thousands of hourly positions. It claims to be the US's largest 'job creator'. Plus it is on a hiring spree internationally as well, another 15,000 plus.

There was also some final PMI data released for August. The ISM report came in with a good expansion and marginally better than expected. The internationally benchmarked Markit one was just a little bit weaker in its final version. But both record healthy expansions. Both recorded strong new order inflows. And both noted severe input price inflation.

Canada also turned in a good PMI result. As did Japan. And the EU, even if it was at a six month low.

But the private Caixin PMI survey in China has reported a contracting factory sector. Yesterday, the official version suggested it has stalled. The differences between the two surveys are minor and both record a downward trend.

Globally, factory PMIs eased to a six month low, although there is still a moderate-to-good expansion underway overall. But things are getting quite tough in emerging economies from Vietnam to Russia to China.

German retail sales fell in July from June and were barely above year-ago levels.

Much to everyone's surprise, the Australian Q2 GDP recorded better-than-expected economic activity. (Some analysts had earlier in August even feared a retreat.) This has powered wholesale rates and exchange rates up, and the Kiwi is along for the ride. By any measure, this is a very good result. 

For the full year to June 2021, nominal GDP now exceeds AU$2.067 tln, up +4.2% above the equivalent June year in 2020, and +5.9% higher than the pre-pandemic June year to 2019. New Zealand releases its Q2 GDP results on September 16, 2021.

But the August PMI for Australia is one of rapid deceleration. Its factory sector is barely expanding now, mainly because of sharp lockdown output falls. Of course, it is unlikely to be any different in New Zealand.

The UST 10yr yield opens today at just under 1.31% which is unchanged from this time yesterday.

The price of gold is down a minor -US$2 from this time yesterday, now at US$1813/oz.

Oil prices have fallen back by another -50 USc so in the US they are now just over US$68/bbl, while the international Brent price is just over US$71/bbl.

The Kiwi dollar opens today firmer at just on 70.7 USc. Against the Australian dollar we are softer at 95.9 AUc. Against the euro we are unchanged at 59.7 euro cents. That means our TWI-5 starts today also unchanged at 73.7 and still near the top of the 72-74 range of the past ten months.

The bitcoin price has risen back +3.6% from this time yesterday to US$48,762. Volatility in the past 24 hours has been moderate at just over +/- 2.5%. 

You can find links to the articles mentioned today in our show notes.

And get more news affecting the economy in New Zealand from interest.co.nz.

Kia ora. I'm David Chaston and we’ll do this again tomorrow.