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This week on the Dismal Science, Mark and Raph take a look at the latest Australian labor market figures and what it means for Mark's increasingly shaky call for a February rate cut.
Is the RBA being too pessimistic about what the unemployment rate associated with full employment needs to be?
Plus, the Dismal Science takes a metaphorical visit to Baku for COP 29 and finds “upside-down geopolitics” at play.
And will President Trump’s reelection derail the action items out of COP29?
Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html
Send feedback to: [email protected]
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Join Mark and Raph to unpack the potential economic implications of the US election result.
We examine some of the key economic policy pledges that President Elect President Donald Trump made during the campaign, from tariffs to taxes, and discuss the possible ramifications for interest rates, inflation, growth, and other economic variables.
President Trump's proposals could send US average tariff rates to their highest level since the 1934 Great Depression. What would this mean for inflation, the US dollar, and the global economy?
We also explore the potential impact of tax cuts and deregulation on growth and profits, as well as the implications for the Federal Reserve and US debt and deficits.
And is this a sign of a broader global shift away from neoliberalism?
Tune in to find out.
Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html
Send feedback to: [email protected]
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This week on The Dismal Science, we examine the latest economic data releases, including wage growth figures, consumer and business sentiment surveys, and the AICD's Director Sentiment Index.
The Wage Price Index showed annual growth slowing to 3.5%, a welcome development for the RBA in its fight against inflation. But with productivity growth stalling, will this be enough to see interest rate cuts in the near future?
Consumer sentiment surged in November, reaching its highest level since the first half of 2022, fuelled by optimism about the interest rate outlook and a strong labor market.
However, this optimism was tempered by the results of the US election, with sentiment declining sharply following the outcome.
Businesses also reported improved confidence in October, but the AICD's survey of directors painted a much bleaker picture, with concerns about inflation, interest rates, and a looming recession weighing heavily on sentiment.
Will the recent positive economic data prove to be a fleeting reprieve, or are we finally turning a corner?
Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html
Send feedback to: [email protected]
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The big news this week is the US presidential election. Markets are reacting in real time as results come in - we look at the volatility and what it means for Australia.
Closer to home, the Reserve Bank of Australia (RBA) left interest rates unchanged for the eighth consecutive month.
We examine the RBA's latest forecasts, which suggest a slightly softer economic outlook than previously predicted, with lower GDP growth, higher unemployment and slower inflation.
But is this bad or good when it comes to taming inflation?
Mark explains why this could actually be good news for those hoping for an interest rate cut.
Also on the agenda: the role of government spending in keeping the economy afloat, and whether now is the time for businesses to start investing.
Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html Send feedback to: [email protected]
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This week we look at the latest Australian inflation figures.
The September quarter CPI figures came in slightly better than expected, with the headline numbers showing a decrease in inflation. This was largely driven by government rebates and falling fuel prices. However, services inflation remains stubbornly high.
Additionally, some commentators are suggesting a December rate cut is possible...will Mark hold firm to his February prediction?
Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html
Send feedback to: [email protected]
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Today we have an in-depth look at the IMF's latest World Economic Outlook report, before returning home to dissect the bumper jobs numbers and latest consumer confidence numbers.
In brief, it was an optimistic outlook from the IMF, begging the question, is central bank credibility back? With that said, champagne flutes should remain in the fridge, as there are still a litany of risks to the global economy identified, and suggestions put forward for both governments and bureaucrats - but how likely are they to happen?
And then we revisit Mark's February prediction of our first rate cut in light of huge jobs numbers, and increasing consumer sentiment.
Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html
Send feedback to: [email protected] -
Another week, another economic roller coaster. Join Mark and Raph to discuss the recent volatility in oil prices, driven by factors including the Israel-Iran conflict and speculation about Chinese stimulus measures.
We then unpack the latest RBA minutes, analysing the central bank's current thinking on interest rates and its assessment of the economic outlook. Have they made a dovish turn?
Finally, we take a look at the latest consumer and business confidence figures. Are Australians feeling more optimistic about the economy? Well, as usual these days, the story is mixed...
If you'd like to give us feedback, feel free to email us at:
[email protected]
And for a deeper dive, read Mark's weekly columns here.
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Much to discuss on the agenda today.
We unpack recent housing data, exploring the slowdown in price and rent growth alongside lagging approvals.
Retail sales showed strength - but the RBA and other analysts disagree on why. Were they impacted by the weather, stage 3 tax cuts, or an early father's day? Mark will be the judge.
Additionally, Australia has hit a fiscal milestone with back-to-back budget surpluses for the first time since the Global Financial Crisis, while the Productivity Commission has provided a sobering update on our productivity growth.
Finally, we'll discuss the dizzying array of factors impacting oil prices on top of the escalating Middle East conflict and what this means for the global economy.
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We begin with a look at recent inflation data. While headline inflation has decreased, Mark explore why the underlying numbers suggest continued vigilance is necessary.
Our discussion then turns to the Reserve Bank of Australia's latest decision to maintain current interest rates.
The focal point of our episode is China's economic situation. We address:
The ongoing property sector challenges Weak consumer sentiment and deflationary pressures Policy responses from the People's Bank of China, including: Interest rate reductions Easing of bank reserve requirements Mortgage rate adjustments Liquidity measures for equity marketsWe evaluate these interventions and their potential impact on China's economic trajectory, considering both domestic and global implications.
For a deeper dive into the weekly figures and trends, visit AICD Chief Economist Mark Thirlwell's weekly column.
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In this short but packed episode, we go through the complex economic landscape facing Australia and the world.
We discuss the significance of the still tight Australian labour market and its implications for monetary policy, dissect why the US Federal Reserve decided on a rather large 50 basis point rate cut, and explore how Middle East tensions could spark global economic instability. All these factors set the stage for a complex upcoming Reserve Bank of Australia meeting.
We love to hear your feedback, email us at:
[email protected] -
Prompted by proposed changes to Australia's Reserve Bank, as well as increased criticism of central banks globally, today we discuss what central bank independence means, its historical development, and the evidence for its effectiveness.
Mark analyses key moments in the formation of modern central bank theory including "The golden age of central banks " of the pre-2008 era , the impact of the Global Financial Crisis, and the post-COVID inflation shock.
We also discuss the implications of central banks acting as "accountability sinks" and explore current challenges to their independence.
This episode aims to provide context for ongoing debates about the role of central banks in modern economies and why these issues matter. We'd love to hear from you as to whether you would enjoy more episodes that provide this type of context, would rather we stick to the latest data, or anything else! Please email us at:
[email protected]
You can find more of Mark's analysis, including weekly economic data here. -
We welcome back AICD Chief Economist Mark Thirlwell, fresh from his holiday, as we dive into the market turbulence that peaked while Mark was celebrating his dad’s 80th birthday in Saltburn.
We explore the Reserve Bank of Australia’s decision to hold steady on rates, as anticipated, and examine the global interest rate landscape, including hints of US rate cuts following the Fed Chair’s speech at Jackson Hole. We also dissect the clash between market expectations and the RBA’s timeline for cutting rates in Australia.
Plus, we take a closer look at the latest GDP report: with six consecutive quarters of per capita recession, growth driven largely by population expansion and public spending, and signs of weakness in the private sector as household consumption, savings, and private investment all fell.
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It's our 200th episode and Ivan's last ever :( Mark turns the tables on him and asks what's changed in economics since we started the podcast and what he's learned along the way. Plus, an experiment in UBI and what we can expect from Trumponomics and Kamalanomics.
A big thank you to all of our listeners for getting us this far.
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Mark Thirlwell is once again joined by Raphael Dixon to discuss the new consumer confidence survey, revealing falling confidence, as well as expectations of an interest rate rise jump.
Topic two discusses the unlikely "marriage of convenience" between some renting millenials and some debt free baby boomers, both hoping for rate hikes.
And finally, birth rates: how do governments use fiscal policy to encourage people to have more babies? So far, not much seems to work.
Referenced articles:
The Economist - Can the rich world escape its baby crisis? (paywalled)
IMF - The New Economics of Fertility
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Mark regales us with the vibe on the ground in Canberra. Plus, an around the grounds on:
• RBA Minutes
• Core logic house and rent price data
• Retail sales numbers
• Job ads
And the number of the week this week asks: if climate change results in supply shocks become increasingly regular to the point of predictability, should food inflation still be excluded from core inflation numbers?
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Monthly inflation numbers have come in hot, adding pressure on the RBA to lift rates.
What does the upcoming French election tell us about Britain, bonds and post-covid fiscal policy?
And does the much hyped Guzman Y Gomez IPO and subsequent share price pop suggest that burritos are recession proof?
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Trade with China continues to flourish despite strategic and political tension. Does Chinese Premier Li Qiang's visit to Australia mean we can continue to, as the Chinese saying goes, pull strongly against the raging tide? Plus, hawkish sounds from the RBA as the path grows ever narrower and the effect of WFH on real wages.
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An end to the era of globalisation has led to developing countries once again falling behind. As the costs of fragmentation become apparent, should a small open economy be doing more to bring back global trade? Plus, continuing resilience in the jobs market, continuing weakness in overall growth, and higher for longer rates in the US.
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Global shipping is gummed up again with Houthi attacks in the Red Sea, renewed pirate attacks in the Gulf of Aden, and drought affecting the Panama canal. But could it get even worse? Plus, inflation picks up again in Australia and retail sales remain stagnant.
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New Zealand economist Roger Dennis advises boards globally on long-term thinking and foresight. We spoke to him on how directors should think about the seemingly endless proliferation of risks, what he calls the paradox of preparedness, and whether Kiwis, living on the edge of the world, have a unique perspective on risk.
For more of Roger's thinking, visit his website.
- Se mer
