Another deep discussion, plus slides with journalist Tarric Brooker.
Thanks to all those who posed us questions (we did not get through them all, but will keep then for our next show…)
Who is the economy for – and what does the data tell us? The charts are at: https://avidcom.substack.com/p/dfa-chart-pack-15th-september-2023 if you want to follow along.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Chasing Our Tails? Your Burning Questions Answered: With Tarric Brooker...
New US inflation numbers came out, and they included at least some reasons for concern. The headline figure deteriorated for the first time in months rising 0.6% in the month and 3.7% year on year. The broadest picture, breaking down into food, energy, and core services and goods excluding food tells the story.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest from the ABS says the unemployment rate remained at 3.7 per cent in August (seasonally adjusted.
They said “with employment increasing by around 65,000 people and the number of unemployed only dropping slightly, by around 3,000 people, the unemployment rate remained at 3.7 per cent in August.
“The large increase in employment in August came after a small drop in July, around the school holiday period. Looking over the past two months, the average employment growth was around 32,000 people per month, which is similar to the average growth over the past year.
“The employment-to-population ratio rose 0.1 percentage point to 64.5 per cent, around the record high in June. The participation rate also increased, up to a record high of 67.0 per cent in August, which, together with the high employment-to-population ratio, continues to reflect a tight labour market,”
Monthly hours worked fell 0.5 per cent in August 2023 (following the increase of 0.2 per cent in July), while employment rose by 0.5 per cent. Despite a small fall in August, hours worked were 3.7 per cent higher than August 2022, continuing to reflect faster growth than the 3.0 per cent annual increase in employment.
“The strength in hours worked over the past year, relative to employment growth, shows the demand for labour is continuing to be met by people working more hours, to some extent,” The ABS said.
But there are a few questions to consider about this data, compared to other information out there. The numberwangers are at it again!
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.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
Well, the slew of economic data in the past few days suggests the UK economy is in a bit of a pickle, with a mix of recessionary signals pulling against some more positive wages news (at least for some). And it highlights the dilemma facing many Central Banks, as their data dependency pulls them in multiple directions and highlights how complex the current environment actually is.
It seems the economy is losing steam, though that’s partly driven by industrial action and unusually wet weather but its tracking well below the Bank of England’s growth forecast for 3Q, and yet cost pressures in the UK are running too high for the central bank to be bounded by growth concerns just yet.
The latest data from the ONS showed that the UK economy shrank at the fastest pace in seven months in July as strikes and wet weather hit activity harder than expected, reviving fears that a recession may be under way. Gross domestic product slipped by 0.5% following a 0.5% gain in June. Economists had expected a contraction of 0.2%. Services, construction and manufacturing all shrank.
The main cause of the contraction was the dominant services sector, which fell 0.5% in July. Cool and rainy weather depressing retail sales during the month. Output was also dented as doctors, teachers and rail staff walked off the job in their disputes with the government over pay.
http://www.martinnorth.com/
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.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
This is an edit of my latest live show, as I walk through our latest financial stress analysis, to end August. Which post codes are most impacted, and what are the potential outlook for prices and defaults?
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
DFA Live Q&A HD Replay: Latest Household Financial Stress And Analysis
More from our property insider Edwin Almeida, as we look at the bulls in the market, silly bidding and vendors bids, and the latest “announcables” which will do very little to solve the housing disaster which awaits many.
Last week, the departing RBA Central Bank Governor Philip Lowe used his final public comments given at the Anika Foundation to defend his more controversial comments, saying while some of his explanations had “missed the mark” the media also had a responsibility to avoid “clickbait”.
But he also highlighted the limitations of monetary policy and suggested that fiscal and monetary policy could be better connected than today, something which should have been considered by the recent RBA review.
So today we look at what he said, and will also touch on where Central Bank Governors go after they leave their post.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
The Limitations Of Monetary Policy (And What Lowe Does Next...)
In recent months Central Banks have been able to say inflation was falling back towards their targets. But, this had little to do with their rate hiking cycle, and more to the adjustment in supply-side prices, especially energy. The so-called base effects where big lifts in inflation months ago dropped out helped the narrative. But the inflation battle is far from over.
This is because ahead the base effects will reverse. And then we must consider the recent spike in energy prices, plus higher wages flowing through to the services sector of the economy. So overall, I think it is likely that inflationary pressures will re-accelerate in the months ahead. In the US as oil and gasoline continue their upward trend, CPI could potentially rise back above 5.1%-5.5% by year-end. Therefore, inflation levels could remain elevated for a more extended duration than is presently anticipated by financial markets.
OK, so we know many households are under severe pressure, thanks to falling real incomes, rising inflation and of course interest rate payments. I covered this yesterday in the context of the latest GDP numbers, which on a GDP per capita basis were pretty frightful.
We have seen a record rise in cost-of-living for employee households, driven by soaring mortgage payments and rents, according to the ABS. Employee households’ living expenses increased by 9.6% in the year to June, which is significantly higher than the CPI inflation rate of 6%.
Since they are the ones who are carrying the majority of the mortgage debt, it is obvious that working Australians have taken the brunt of the RBA’s fight on inflation.
But is does beg the question, what levers do households have to try to regain some balance in their finances?
Well, of course there is the obvious one, make sure you have the lower rate on your mortgage and best rates on your savings – as I discussed a couple of days back. Many potentially can save by getting better rates, and we are talking potentially of thousands of dollars!
And make sure you know where you cash flow is going, so you can prioritise effectively, do you really need all those streaming services, and big mobile plans, for example.
The other lever though is just work harder, for more hours. And the recent ABS data showed the hours worked growing fast. But data released today from the ABS showed the number of people working multiple jobs and the percentage of employed people having more than one job reached record highs in the June quarter of 2023.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
UK house prices fell at their sharpest annual pace since 2009 after soaring mortgage rates curtailed how much buyers could afford, Halifax, one of the nation’s biggest mortgage lenders said today.
Halifax said the average value of a home fell 1.9% in August alone to £279,569, the sharpest monthly pace since November. It left prices 4.6% lower than a year ago when the value of UK property peaked.
The Bank of England has raised interest rates 14 times since late 2021 tame inflation, and that’s straining the finances of consumers already hit with higher food and energy bills.
As a result, the market is slowing, with year on year property transactions down 21.7%, mortgage approvals also down 21.7% and new buyer enquiries down 45%.
“We do expect further downward pressure on property prices through to the end of this year and into next, in line with previous forecasts,” Kim Kinnaird, director at Halifax Mortgages.
