Economic Data – Page 69 – Digital Finance Analytics (DFA) Blog

Will The Building Approval Improvements Be Short Lived?

The total number of dwellings approved rose 3.6 per cent in seasonally adjusted terms in November, following a 13.6 per cent fall in October.

This uptick in construction may not continue, stating that while working from home may support approvals in the short-term, and that omicron could induce higher savings rates, there are bigger risks to building approvals – specifically higher interest rates.

We also know that because HomeBuilder brought forward a lot of housing projects; there are a lot of people who maybe usually would have started to build a home this year or next year that did it last year instead when they could have got HomeBuilder. So all of those factors together do create a risk of building approvals falling further in the longer term.

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FINAL REMINDER: DFA Live 8pm SYDNEY: Another Lost Decade Ahead?

Join us for a live Q&A as I discuss the risk of another lost decade with regard to the Australian economy with Leith van Onselen who writes as the Unconventional Economist at MacroBusiness. Leith has previously worked as an economist at the Australian Treasury, Victorian Treasury and Goldman Sachs. He has a strong background in economic policy and financial sector regulation. Leith holds a Bachelor of Commerce (Honours) degree from Melbourne University and a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia (now FINSIA). Leith can also be found on twitter: twitter.com/leithvo.

You can ask a question live via the YouTube Chat.

The Incredible CPI Numberwang

The ABS has annually re-weighted the Consumer Price Index (CPI) and Selected Living Cost Indexes (SLCIs) since 2018, predominantly using Household Final Consumption Expenditure (HFCE) data. Annually re-weighting the CPI ensures that the CPI basket continues to be representative of spending by Australian households.

Last week they published the proposed changes to the index, The 2021 re-weight will apply from the December 2021 quarter. The CPI will be released on 25 January 2022 and the SLCIs will be released on 2 February 2022.

No surprise then that CPI is on average understated. The question is by how much. It is a complex task to try to recompute the true CPI, and it depends on both methodology and baseline assumptions. However my quick back of the envelope estimate is the true CPI in Australia is running closer to 7%. Which means the RBA have taken interest rates way to low, an inflated housing to the max. This is another pure case of Numberwanging…

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

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The Witches, Virus, Central Bank Volatility Dance – Market Update 18th December 2021

Wall Street finished lower on Friday, weighed down by Big Tech as investors worried about the Omicron coronavirus variant and digested the Federal Reserve’s decision to end its pandemic-era stimulus faster.

Stock moves were magnified by intense activity in the options market, potentially making Friday one of the busiest trading days of the year due to the S&P Dow Jones Indices quarterly re-balance, which comes into effect after markets close on Friday. It is also “quadruple witching” day in U.S. markets, when options and futures on indexes and equities expire. With options expiring, volume on U.S. exchanges jumped to 16.6 billion shares, far above the 11.9 billion average over the last 20 trading days on Friday.

The latest edition of our finance and property news digest with a distinctively Australian flavour.

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The Inflation Bazooka Wasn’t – Market Update 11 Dec 2021

Markets in the US had a strong end to the week, as investors reacted to the fact that November’s consumer prices gains met expectations, and continue to hope it will fall back, so easing pressure on the Federal Reserve to accelerate it taper and the timing of a rate hike.

Looking to next year, supply chain challenges will continue to drive up prices in the near term but are expected to fade as Americans shift toward more normal consumption patterns. Still, other factors, like labor constraints and housing costs, may keep inflation elevated.

The CPI report from the Labor Department showed consumer prices surged last month to a 6.8% annual growth rate, the highest reading in more than 39 years.

While that was distorted to a degree by upheavals in prices a year ago due to the pandemic, the core rate — which strips out more volatile food and energy prices – also hit a 30-year high of 4.9%. The headline rate rose by 0.8% on the month and the core rate by 0.5%, both chunky increases that suggest that companies are still able to pass on higher costs to their customers more or less at will.

CONTENTS

0:00 Start
0:17 Introduction
1:57 US CPI
4:00 Inflation – Here To Stay?
7:00 Political Reaction
7:45 Market Movements
10:29 Coffee Futures
12:03 Short Sellers Under Scrutiny
12:57 UK Markets on Plan B
15:15 You Can’t “Invest” In Crypto
17:40 China Evergrande
18:45 WCI Index Up Again
19:25 Australian Market
21:38 Summary and End

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