RBA puts it into neutral with 4+4
The RBA today made November’s decision and pre-committed to buying at a 4bn pace until at least February 2022. The
Category: economics
Q2 GDP: a bit better than it looked
Q2 GDP was +0.7%qoq and 9.6%yoy, to be pretty much bang-on the RBA’s forecast of 9.5%yoy. I said this morning
Q2 GDP: Better than it’ll look
Q2’21 GDP is going to be weak: say +0.25%qoq. More likely 0%qoq than 0.5%qoq. My tracking estimate of the GDP-expenditure
RBA ‘thesis snaps
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.
Five points on the income tax cut debate
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.
Australia’s disappearing Phillips Curve
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.
Lowe locks June … looks awkward
RBA Gov Lowe delivered a speech that was widely interpreted as locking in a 25bps rate cut in June. The
RBA’s labour market (cut) test is met
The April employment report revealed a slackening of the labour market — and is probably enough to get a 25bps
Two points on WPI
The Australian Q1’19 Wage Price index again printed at 0.5%q/q (2.3%y/y). This is the 11th print in the ~0.5%q/q ballpark
There goes the employment bull-case
I must admit to being a bit stunned by the RBA’s May SOMP. There were a number of elements that
RBA holds; bring on Lowe-flation
Against my expectations, the RBA left their policy rate at 1.5% today. My main lesson from all this is that
Inflation and Monetary Policy — redux
My call that the RBA would cut rates in May was originally a little speculative — but following the Q1’19
ricardian ambivalence 