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Capital
®
Volume 25 Number 17
Capital Dynamics Sdn Bhd
9
Going forward, with prices rising and auction clearance rates remaining at high levels, the total value
of housing finance commitments should continue to rise in the coming months although the
approaching holiday season could dampen this trend somewhat.
Table 16: Housing Finance
(% change)
From Sep 2013
From Oct 2012
Total dwelling commitments
4.1
21.4
Owner occupied housing
1.7
17.2
Construction
0.5
16.7
Purchase of new dwellings
0.3
11.0
Purchase of established dwellings
2.4
17.5
Investment housing
8.2
28.8
In Dec, the leading indicator of employment fell for the second consecutive month and cyclical
employment declined for the seventh consecutive month. However, it is still too early to tell whether
employment will grow more slowly than its long-term trend rate of 1.2% per annum over the coming
months. The leading indicator of employment is expected to remain sluggish in the months ahead
amid weakening consumer confidence and signs of a slowdown in economic activity after the post-
election pickup.
The seasonally adjusted unemployment
rate edged up by 0.1 ppts in Nov while
the
participation
rate
remained
unchanged at 64.8% – see
table 17
.
Despite the rise in the unemployment
rate, total employment increased by
21,000 as both full-time and part-time
employment picked up from the previous
month. However, the labour market is
still extremely soft with the number of
people looking for full-time work
remaining at its post 2008 US-led global
financial crisis level – see
figure 9
.
Table17: Labour Indicators
Oct 2013
Nov 2013
Change
Unemployment rate
(%)
5.7
5.8
+0.1 ppts
Participation rate
(%)
64.8
64.8
0.0 ppts
Employment
(‘
000 persons
)
11,638.9
11,659.9
21.0
Full time
8,092.4
8,107.9
15.5
Part time
3,546.5
3,552.0
5.5
A.2. International Perspectives
A.2. (i). New York
No matter how one looks at it, US monetary tightening is near. There are really no good reasons to
hold it back or to postpone it anymore. The ISM manufacturing report for Nov was very strong. Not
only at the headline number but also at the key components’ level. New orders, exports and most
importantly, employment jumped.
Remember these are forward looking indicators, which was soon followed by an unexpectedly strong
coincident indicator, Nov’s employment data. Not only was the jobs gain better than expected but the
unemployment rate plunged to 7%. In the past, this positive figure would be offset by a fall in labour
participation rate. Lo and behold, the labour participation rate actually rose in Nov. The message was
unambiguous from Nov’s job report.
Now, the final nail in the debate about the Fed’s monetary tightening has been hammered in. The US
politicians have reached agreement on the US budget deficit reduction. The budget negotiators
announced an agreement to ease automatic spending cuts by US$63 bln over 2 years and reduce the
deficit by US$23 bln, ending a multiple-year cycle of fiscal circus. The bipartisan budget accord would
set US spending at about $1.01 trillion for this year and would reduce US budget deficit by around
US$20 bln to US$23 bln. Not a big deal but the fact that the Democrats and Republicans in Congress
were able to agree breaks the destructive mindset of selfish narrow interests and decision-making
which have been driven by crisis and panics.
250
300
350
400
450
500
550
2006 2007 2008 2009 2010 2011 2012 2013
Figure 9: People looking for full-time work
Jan 2005 - Nov 2013
'000