Australia Building Permits See Worst Two-Month Drop Since 2009

(Bloomberg) -- Australian building approvals suffered the biggest annual back-to-back drop in almost a decade as a housing slump deepens.

Building permits fell 22.5 percent in December from a year earlier after plunging 33.5 percent in November, Australian Bureau of Statistics data showed in Sydney Monday. That’s the worst two-month result since January-February 2009, during the depths of the global financial crisis.

Australia Building Permits See Worst Two-Month Drop Since 2009

A separate private report from Australia & New Zealand Banking Group Ltd. showed job advertisements slid 3.7 percent in January from a year earlier, the first annual decline since April 2015.

The fall is significant because a healthy labor market is a key reason why the Reserve Bank is likely to stare down market pricing for an interest-rate cut. Policy makers see low unemployment as ensuring households can meet their financial commitments and as a signal of underlying strength in the economy.

The Australian dollar fell after the reports, buying 72.36 U.S. cents at 12:25 p.m. in Sydney from 72.52 before their release.

The RBA has kept rates on hold at a record-low 1.5 percent since August 2016 and maintains the economy is weathering a reversal in property prices. Sydney’s housing market is down 12.3 percent from peak-to-trough -- having soared in the five years through mid-2017 in response to policy easing. The central bank expects low rates to keep tightening the labor market and eventually drive faster wage growth and higher inflation.

The RBA holds its first policy meeting of the year Tuesday; Governor Philip Lowe delivers a speech Wednesday; and the central bank releases its quarterly update of forecasts for economic growth, inflation and unemployment Friday.

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