More females employed

Females accounted for 7,600 persons of the 7,800 persons between October 2017 and October 2018 to 261,800 persons employed as ‘Professionals, Senior Officials and Technicians’ that had the second largest increase in employment in the period in Jamaica, data from Statistical Institute of Jamaica (Statin) reported today.
The largest change in employment by industry group was in ‘Real Estate, Renting & Business Activities’ with an increase of 9,700 persons, (11.9 percent) moving from 81,700 in October 2017 to 91,400 in October 2018. Employment, however, decreased in ‘Transport, Storage and Communication’ by 7,500 persons (9.4 percent) to 72,000 over the same period.
Statin stated, “the unemployment rate was 8.7 percent in October last year and represented a reduction of 1.8 percentage points relative to 10.5 percent in October 2017”. There was an increase in the number of persons employed, particularly females in the industry group ‘Real Estate, Renting & Business Activities’
The Employed Labour Force for October 2018 was 1,219,700, 14,400 or 1.2 percent higher than in October 2017.

Prices in Jamaica plunged for December

Prices in Jamaica on average, fell sharply by 1 percent in December last, bringing inflation as measured by the country’s Consumer Price Index to 2.4 percent for the calendar year. The fall in inflation for December occurred across several main categories of goods and services.
The movement in the index for the fiscal year-to-date was 2.7 percent. The rate of increase on average is well below the target set by the government for the central bank to aim at, for the fiscal year of 4 to 6 percent. Had it not been for a spike in the rate of exchange between April and September last year, the rate for the year would have been even lower than the final numbers reported.
Food and Non Alcoholic Beverages and the Transport division declined by 1.5 percent. The fall in Food and Non-Alcoholic Beverages resulted from a decline of 6.2 percent in Vegetables, Starchy Foods due to increased supplies of agricultural produce the Statistical Institute of Jamaica (STATIN) stated. The decrease in the Transport was due to lower prices for petrol, while Housing, Water, Electricity, Gas and Other Fuels fell by 1.3 percent, due mainly to reduced rates for electricity, sewage and water rates.

Xmas cash suggests higher growth – BOJ

Currency in circulating increased at a much faster pace that Bank of Jamaica projected in early December. According to the Central Bank “the faster currency growth possibly reflected improved GDP growth, employment and retroactive wage settlements during the period.”
During the last six days of December, Bank of Jamaica recorded net currency issue of $5.457 billion to financial institutions. This was substantially above the Bank’s projection for net issue of $412 million as well as the $860 million currency issue for the corresponding period of 2017 and average of $1,396 billion over the past 5 years. The currency issue for the week contributed to an overall growth of $23.6 billion or 21.4 per cent in the currency stock for December 2018, above the Bank’s projection for growth of $18 billion or 16.5 per cent. The increase for the month also exceeded that for December 2017 of 16.5 percent and was the largest growth in December since 2007.

Grace new HQ close to the end of construction in downtown Kingston

At the end December 2018, the currency stock amounted to $133.5 billion, representing an annual increase of 20.4 percent, compared to annual growth of 12.9 per cent at end December 2017. The Central Bank stated that “when the estimated change in consumer prices is taken into account, the real annual growth in currency at end-December 2018 was 15.9 per cent, compared to 7.3 per cent for the corresponding period in 2017”.
The Bank is anticipating, that most of the currency issued during December, will be redeemed in January. The release from the bank stated that, “for the last five years, net currency redemption in January averaged 75.8 per cent of the net currency issued in the preceding month.”

Jamaica’s growth crawls along at 1.8% PA

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Construction secrtor contributed to increased growth in Q3.

Economic growth in the Jamaican grew 1.8 percent in the third quarter of 2018 over the similar quarter of 2017. The performance result in gains in the Goods Producing and the Services Industries.
The goods producing sector grew by a strong 5.1 percent but the services sector was up just 0.7 percent over the similar period in 2017, the report from the Statistical Institute of Jamaica (Statin) stated in their release on the performance on the local economy for the third quarter of the year.
According to Statin, all industries within the Services Industries recorded higher levels of output with the exception of Electricity & Water Supply which declined by 0.1 percent and the Producers of Government Services which remained unchanged for the period. Increases were recorded for: Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (0.8 percent ), Hotels & Restaurants (2.1 percent ), Transport, Storage & Communication (1.4 percent ), Finance & Insurance Services (0.7 percent ), Real Estate, Renting & Business Activities (0.5 percent ) and Other Services (1.2 percent ).

Mining was the biggest contributer to GDP gains in Q3.

Hotels & other short-stay accommodation benefited from a 3.8 percent increase in foreign national arrivals, the report stated. The Goods Producing Industries grew due to increased output in Mining & Quarrying, up 51 percent due mainly to the reopening of Alpart refinery and Construction up by 3.7 percent due to increased activities in the civil engineering sub-group. The major contributor to this growth was work associated with the continued expansion of road infrastructure. However, Manufacturing declined by 0.3 percent due mainly to lower production levels, in petroleum refining and non-metallic minerals. Agriculture, Forestry & Fishing remained unchanged. The growth for the third quarter brings real growth for the year to September to 1.8 percent over 2017. Gross domestic product for the calendar year, grew 0.9 percent in 2015, 1.4 percent in 2016 and 1 percent in 2017.

BOJ senses pick up in GDP growth

Image courtesy of arztsamui/

Economic activity may has picked up pace in the latter half of the year compared with the first half, with a strengthening in real GDP growth and employment over the second half of the year, Bank of Jamaica is suggesting.
The central bank was commenting on the increase in money in circulation for December. “This projected acceleration in the growth in real currency demand for December 2018 is consistent with the higher growth rate that has been evident between August and November 2018,” the central bank stated. Economic growth in the June quarter was preliminarily placed at 2.2 per cent by the Statistical institute of Jamaica.
The bank went on to say, “when the forecasted change in the general level of consumer prices is taken into account, the projected real growth in currency for the 2018 is 10.5 percent, which is higher than the real growth of 7.3 percent for the previous year.”
The projected currency stock of $128 billion at end-December 2018 represents an annual growth of 15.5 percent, an acceleration when compared with the 12.9 percent recorded at December 2017.
Bank of Jamaica projects that the value of currency issued by the Bank will increase by approximately $18 billion (or 16.5 percent) in December 2018 to end the month. The central bank states that the projected growth for the month is broadly consistent with the 16.5 percent growth recorded for December 2017 as well as the five-year average growth rate of 17.3 percent for December.
BOJ net issued $4.2 billion in currency for December up to 14, this year (representing a 3.8 percent growth for the month to date). This compares to net currency issue of $1.4 billion over the same period in 2017.

Crude oil sinks below U$49

The price of crude oil on the world market sank to US$48.49 in early morning trading, the lowest levels since October 2017. The price peaked at US$76.10 in early October this year.
The trend suggests that the price will go even lower with increasing supplies said to be coming from production in the USA and concerns that the global economy is slowing and would use less oil.
The change in price has significance for the Caribbean region that are mostly net importers of oil, as well as Trinidad and Tobago who are producers of oil, and will earn far less income from the lower price. For Jamaica, it is likely to tame inflation as it did in November, when the country recorded zero inflation. It will also make the Bank of Jamaica’s inflation target of 4 to 6 percent targeting for the current fiscal year that the Country’s Central bank states was set by the Minister of Finance and the Public Service in September 2017, far more challenging than it was before.
If the price remains below the US$50 mark for a prolong period, then Jamaica could save somewhere in the region of US$$300 million per annum and that could positively affect the exchange rate, for the local currency.

No inflation

Fall in the price of fuel and appreciation of the Jamaica dollar helped in pushing inflation down in November with data out of Statistical Institute of Jamaica (STATIN) showing zero inflation.
According to Statin, the result was influenced by a 0.3 percent increase in the index for the division Food and Non-Alcoholic Beverages. This was as a result of higher prices for vegetables, starchy foods and fruits but was tempered by a 0.8 percent decline in the division Housing, Water, Electricity, Gas and Other Fuels due mainly to reduced rates for electricity despite the increased rates for water and sewage. The Transport division declined by 0.7 percent as a result of a decrease in the price for petrol. The calendar year-to-date inflation was 3.5 percent while the movement in the index for the fiscal year-to-date was 3.8 percent and the movement for the past 12 months comes out at 4.1 percent.

Treasury bill rates inched higher

Bids for Treasury bills for three offerings for the government of Jamaica that were auctioned on November 15 in the amounts of $700 million each resulted in modest increase in two and a slight decline in another.
The auction attracted $826,712,000 for the 91 days issue, $1,097,475,700 for the 182 days bill and $1.997 billion for the 283 issue. The bills attracted in less amounts than the previous auction in October by $895 million and $1.4 billion each for the other two issues.
Average Yield ended at 1.95181 percent for the 91 days instrument, up from 1.786 percent in October. The 182 days Treasury bill inched up to 1.98594 percent from 1.954 percent but the 283 instrument, slipped modestly, to 2.05676 percent from 2.064 percent.

Inflation moderates in October

Prices in Jamaica increased in October but at a slightly slower pace than in September according to the Statistical Institute of Jamaica (STATIN) in a release today.
“The All Jamaica Consumer Price Index for October recorded an inflation rate of 0.7 percent”, the report from Statin said, down from 1.1 percent in September. The movement in the October CPI was influenced by a 1.7 percent increase, for Food and Non-Alcoholic Beverages. Prices for vegetables and starchy foods resulting in the group Food moving upwards by 1.8 percent. The Transport division increased by 0.5 percent as a result of an increase in the price for petrol and air travel.
The increases were tempered by a 1.3 percent decline in the division Housing, Water, Electricity, Gas and Other Fuels due mainly to reduced rates for electricity despite the increased rates for water and sewage, the Statin report stated. The index

Crude price in sharp fall coupled with J$ appreciation to create negative inflation ahead.

for the group Electricity, Gas and Other Fuels fell by 2.5 percent while, the group Water Supply and Miscellaneous Services Related to Dwelling advanced by 0.5 percent.
The calendar year-to-date inflation was 3.5 percent while the movement in the index for the fiscal year-to-date was 3.8 percent with inflation over the last 12 months being 4.7 percent.
The higher inflation rate came as a result of the rate of exchange of the Jamaican dollar sliding from around $125 to one US dollar in May to a low of $137.95, that would have helped to push up the prices of imported items and petroleum and spiked inflation that ran at a negative rate up to May. Since October when the survey would have been done, the rate of exchange for the Jamaican dollar appreciated J$132.17 to the US dollar and since then appreciated further to J$126.58 to the US dollar and seems set to enjoy further appreciation.

Early Xmas present for Jamaicans

Imports of fuel fell in 2016

Consumers are set to get early Christmas present thanks to a sharply appreciating local dollars and a big drop in the price of oil.
The price of West Texas Crude oil is now down to 55.73 per barrel for the first time in almost a year. The price was at US$55.33 at the start of November last year and started to climb sharply after December to hit US$71 by mid-May this year and just over US$76.40 at the beginning of October before it started a steep decent to today’s level. The technical chart suggest that it could go lower still with excess supplies on the world market and slowing demand.
The cut in price has several implications for Jamaica that is a big importer of the product. It could mean savings in Foreign exchange around US$40 million per month at the current price. It will ease consumers cost as prices of petrol and electricity fall, but government will collect less taxes from petrol and GCT from JPS bills.
The fall also has implications for Bank of Jamaica with their inflation targeting, pitched extremely high originally at more than 4 percent and revised recently down to 3.5 percent on the low end for the fiscal year to March 2019. Those targets seem off as the fall in the price of oil coupled with the sharp revaluation of the local dollar is set to push the country through another round of deflation once more.