China Unexpectedly Posts $7.3, Billion Australian Employers Unexpectedly Cut Worker, New Zealand Unexpectedly Cuts Rate by 0.5% — 100% of all economists surveyed on these points were wrong

China Unexpectedly Posts $7.3 Billion, the Biggest in Seven Years, Australian Employers Unexpectedly Cut Worker, New Zealand Unexpectedly Cuts Rate by 0.5%. All this during a single day. Have these far east bubble economies finally topped?

A few interesting points about China:
  • All 21 economists were expecting a surplus and were hence completely wrong. As expected.
  • Chinese entrepreneurs must be squeezed between commodity prices soaring at one end, and salary increases forced on the employers by their governments.
  • Western economies want China to boost internal consumers, which is what this trade deficit could mean, but at the same time, markets seem to be unhappy with the trade deficit announced today. 
Interesting points about Australia:
  • All 20 economists were expecting the number of jobs to rise and were hence completely wrong. As expected.
  • Employers unexpectedly cut workers. Why unexpectedly? Because for the past couple of months, all the lemmings were celebrating the floods that would bring in a lot of construction spending (Broken Window fallacy) and that they would also result in a lot of hiring for cleaning the mess and reconstruction. Doesn't seem like it's happening, on the contrary. Now they are telling us that "floods and cyclone disrupted hiring".
  • It looks like the next move from the Central Bank will be to cut interest rates, and not raise them, as I have been forecasting, against the consensus.
Of course, all these could be one-offs. But for the good of the economy and the people, it's important that the credit bubble busts (and of course that the central banks are abolished, along with fiat currency and partial reserve banking).

Here are some quotes from the Bloomberg reports, starting with China:
March 10 (Bloomberg) -- China reported an unexpected $7.3 billion trade deficit, the biggest in seven years, buttressing the government’s case against U.S. arguments for faster gains in the yuan.

Exports rose 2.4 percent in February from a year before, the least since 2009 as Lunar New Year holidays disrupted shipments, and imports climbed 19.4 percent, customs bureau data showed today. Central bank adviser Li Daokui said that the full-year trade surplus will shrink from the 2010 level.
Today’s number compared with a $6.5 billion surplus in January. The median estimate in a Bloomberg News survey of 21 economists was for a $4.9 billion excess of exports over imports in February.
Speaking in Beijing, Li, the central bank adviser, said the annual surplus may slide to $150 billion this year, from $183 billion in 2010 and the record $295 billion in 2008. Chinese officials this week affirmed policies to boost domestic consumption, including raising minimum wages an average of 13 percent a year in the five-year plan running through 2015.

The swing in February to a trade deficit may aid central bank officials working to prevent an excess of cash in the financial system from worsening inflation that has already breached the government’s 4 percent target for 2011. Pressure for more increases in banks’ reserve requirements may ease, Bank of America-Merrill Lynch said in a note.
The nation last posted a trade deficit, of $7.2 billion, in March 2010.
March 10 (Bloomberg) -- Australian employers unexpectedly cut workers in February for the first time in 18 months as floods and a cyclone disrupted hiring in the nation’s northeast.

The number of people employed fell by 10,100 from January, led by a drop in part-time jobs, the statistics bureau said in Sydney today. That compares with the median forecast for a 20,000 increase in a Bloomberg News survey of 20 economists. The jobless rate held at 5 percent.

Reserve Bank of Australia Governor Glenn Stevens said last month a deluge in January and cyclone in February in Queensland may cut 1 percentage point from growth this quarter. Recent reports showed building approvals declined by the most in eight years, consumer confidence slid and retail sales are slower, suggesting the central bank may have scope to extend a pause in interest-rate increases.
The number of full-time jobs advanced by 47,600 in February and part-time employment fell by 57,700, today’s report showed. Australia’s participation rate, which measures the labor force as a percentage of the population over 15 years old, dropped to 65.7 percent in February from 65.8 percent a month earlier, it showed.
New Zealand:
March 10 (Bloomberg) -- New Zealand’s central bank cut its benchmark interest rate to a record low, reducing the attractiveness of the nation’s assets as officials from Beijing to London move to contain inflation by raising borrowing costs.

Governor Alan Bollard today lowered the official cash rate half a percentage point to 2.5 percent and signaled no change until next year, citing the economic damage of an earthquake in Christchurch. Ten of 14 economists surveyed by Bloomberg News expect rates are on hold until the first quarter next year.

New Zealand’s dollar, the worst-performing G-10 currency this year, may fall further on concern the nation will slide into a recession and the prospect that Australia, Korea, the euro area and the U.K. will raise rates this year. Bollard said the economy may contract in the first quarter as the aftermath of the magnitude 6.3 quake in the nation’s second-largest city on Feb. 22 hurts consumer confidence and spending.
Eighteen of 25 economists surveyed by Bloomberg News expect Australia will raise its benchmark rate in the second quarter.

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