macro, politics, markets, ambivalence
Another quarter of weak consumption and a decline of the ABS measure of job vacancies challenges the RBA’s conclusion that there’s no wealth effect form housing & their reliance on the lagging ABS measure of labour demand.
In this post I look at the federal election results in Qld. I first look at the two-party-preferred swing, and then at the swing in the Labor primary vote. The closer a seat is to a coal mine (particularly Adani) the lower the ALP primary vote and the larger the 2pp swing to the LNP.
The RBA cut 25bps to 1% on 2 July, delivering a rare back-to-back easing. They didn’t, however, drop the sort of hint that would suggest another cut in August.
I don’t think the RBA will cut their cash rate in July. It would be odd and out of character for a Governor and a Board that has emphasised that importance of the Bank being ‘a source of stability and confidence’ over the past few years.
Taxes have been growing more quickly than income — so the tax share of the average person’s income has gone up sharply. In this post I lay out the facts about the income tax debate. It’s most about returning bracket creep, and stabilising the tax share of GDP.
Terry McCrann (again) spiked the markets on Wednesday with an explosive article that warned that the RBA could cut 50bps
The RBA’s realisation that the NAIRU is a bit lower is a case of better late than never. The data shows that the relationship has been getting flatter at a lower level of inflation for some time.
