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Treasurer Wayne Swan says the latest jobless figures from Europe are a stark reminder of the difficult conditions in the global economy.
He described the eurozone jobless rate of 11.6 per cent as "shocking", and said the situation in Australia "couldn't be more different".
"Our unemployment rate has a five in front of it (5.4 per cent) which is less than half the rate in the eurozone," he told parliament on Thursday, adding that the Australian economy was stronger than that of any other developed country.
A troubled global economy was a key factor in the central bank cutting the cash rate in October, but new data showing a pick-up in Chinese manufacturing could stall a further reduction next week.
The official Chinese manufacturing index rose from 49.8 to 50.2 in October, the first time it has been over 50 since July, indicating the sector is expanding again.
TD Securities head of Asia-Pacific research Annette Beacher said this and last week's stronger than expected inflation numbers should see the Reserve Bank of Australia (RBA) keep interest rates on hold at next Tuesday's monthly board meeting.
"The RBA can afford to pause at 3.25 per cent and 'wait and see' for the next round of monthly data, as well as assess the impact to date of previous easing," she said in a client note.
Aussie Home Loans executive chairman John Symond disagrees, saying the RBA should cut the cash rate to three per cent as the economy is susceptible to shocks from overseas.
"Small retailers and businesses are doing it tough as we head into the crucial Christmas retail season," Mr Symond said in a statement.
Australia's own manufacturing index, produced by the Australian Industry Group (Ai Group) on Thursday, backed these sentiments by remaining below the key 50-point mark in October at 45.2, despite rising 1.1 points in the month.
"Manufacturers continue to find the going very tough in the face of the strong dollar, weaker demand in export markets and flat conditions across the non-mining sectors of the domestic economy," Ai Group chief executive Innes Willox said.
At the same time, the latest RP Rismark Home Values Index showed that house prices were down one per cent in October, and 1.1 per cent lower than a year earlier.
The Australian Bureau of Statistics international trade price indexes also showed the nation's terms of trade in steep decline in the past year.
Its export price index fell 6.4 per cent in the September quarter, while its import price index declined 2.4 per cent.
Commonwealth Bank associate economist Diana Mousina estimates the terms of trade to be 14.4 per cent lower than the peak a year ago, but that would not surprise the RBA.
Ms Mousina said the data took into account a 12.1 per cent drop in iron ore prices in the quarter.
"While commodity prices are unlikely to rise in the near term by as much as they have in the past, they will remain at historically elevated levels," she said.
Based on information provided by and with the permission of the Western Australian Land Information Authority (2013) trading as Landgate.