Category Archives: economics

Underwater mortgages

The fact that Australian house prices are now back to 2016 levels (or below in some areas) means that there is a rising number of property transactions where the purchase price is now above the current valuation (or more importantly, … Continue reading

Posted in AUD, economics, Housing | 5 Comments

The right way to think about Job Vacancies

My read of recent RBA communication, particularly RBA Ellis’s speech on the household sector earlier this week, is that the Bank is worried about a consumption slowdown that bleeds into the rest of the economy. It is therefore through that … Continue reading

Posted in AUD, economics, RBA | 5 Comments

The RBA’s Consumption trigger

RBA Assistant Gov (Economic) Luci Ellis this morning gave a very careful speech on the household sector. In particular, it goes into some detail about why household income in the national accounts has looked so weak despite a firm labour … Continue reading

Posted in AUD, economics, Labour Market, RBA | 8 Comments

The RBA just gave notice

The minutes to the RBA’s March board meeting seem designed to put the market on notice for a rate cut — at any time. The final paragraph repeated that they would “continue to assess the outlook carefully”, but they added … Continue reading

Posted in AUD, economics, RBA | 6 Comments

The case for May Rate cut

I think the RBA will — and should — cut their cash rate 25bps to 1.25% at their 7 May meeting. They have a chunky downgrade to put through for growth, inflation isn’t expected to get back to their target … Continue reading

Posted in AUD, economics, RBA | 12 Comments

Another look at Nominal Household Income

I was a little thrilled when I saw a link to my blog from a Scott Sumner post on econlib (thanks Rajat!). Scott took a look at my NGDP post and said that he prefers total labor compensation — which … Continue reading

Posted in AUD, economics, monetary policy, RBA | 2 Comments

Australia’s NGDP problem

I think that the increased focus on NGDP these days is good. Firms and households live in a nominal world, so it’s important to think about the nominal picture. However, too much of a good thing is also a problem, … Continue reading

Posted in AUD, economics | 7 Comments

The GDP v. Jobs non-puzzle

Today’s speech by RBA Gov Lowe said that they were puzzling about the concurrent GDP slowdown and strength in the labour market.  Other indicators of the economy, though, paint a softer picture. We will receive another reading on GDP growth … Continue reading

Posted in AUD, economics, monetary policy, RBA | 7 Comments

Average wages slump in Q4’18

The biggest problem in Aussie macro is weak household cash flow. Today’s Aussie Business Indicators report suggest that things are getting worse — not better. On the quarter, nominal wages and salaries paid by the private sector grew by a little … Continue reading

Posted in AUD, economics, Labour Market | 7 Comments

The GDP beauty pagent

Keynes famously compared investing to betting on the outcome of a beauty pageant.  With the RBA providing a little more transparency about their GDP forecasts in an appendix to the SOMP  there is now scope for a similar game — … Continue reading

Posted in AUD, economics, RBA | 2 Comments