Market set for a shaky start

THE Australian share market is set for an uninspiring start today despite US shares closing on a positive note last week.

Positive economic data from China and a good start to the US earnings report season meant Wall Street and Europe traded strong at the end of the week. European shares were up 5 per cent, the Dow was up 1 per cent and the S&P 500 Index was up 0.7 per cent.

“But the funny thing is our futures contract is flat,” AMP Capital’s chief economist Shane Oliver said. “Normally a rally on Wall Street should be positive for us.”

Dr Oliver said the federal election campaign is likely to cause some volatility, and all eyes will be on national employment figures for the month of March when they are released on Thursday.

It is unlikely there has been enough new jobs created to stop the unemployment rate rising to 5 per cent, after dipping to 4.9 per cent in February. While growth across the country has been steady, it hasn’t been able to absorb new entrants to the workforce, like migrants and graduating students, and the participation rate has also been rising, Dr Oliver said.

Prime Minister Scott Morrison and federal Labor Leader Bill Shorten will continue to talk about making more jobs in the lead up to polling day, but the economist warned of taking promises too seriously.

“We are generating good jobs growth in Australia, but I’d be a bit skeptical of precise numbers,” he said. “I have no doubt the Australian economy will continue to generate jobs going forward, it’s just that you can get into all sorts of debates about the numbers, particularly when you’re talking about numbers spread out over many years.”