In-case-you-missed-it Monday: the real stories that mattered in the financial papers this week.
Jobs Market Holds the Line
The unemployment rate ticked up slightly last week to 3.8% – still one of the lowest numbers on record.
However, economists are starting to question whether this is actually an accurate reflection of reality, since we know the economy is slowing, and other indicators of the job market are suggesting we should be getting weaker results. For example, the number of corporate insolvencies jumped to a 25 year high last week!
While there’s reason to doubt the jobs data, the RBA will have to play this ball on its merits. To that extent, the economy looks strong and inflation risks remain.
With stronger data on both jobs and inflation in recent weeks, markets are back-peddling furiously on their expectations for rate cuts this year. This is market pricing in America and it’s tanked:
No Wonder We’re Hurting
Interesting chart out of CBA last week, comparing household debt servicing ratios across the globe. What it shows is that Aussie households have far and away the biggest debt burdens in the world!
Some of that comes down to the fact that we have a lot of offset accounts in Australia, which makes the data seem worse than it is:
Never-the-less, this helps explain why households are hurting, consumption is falling, and the retail sector is struggling.
Another Take on the Housing Shortage
CBA economist Harry Ottley also noted an interesting correlation last week. He showed that rental price growth is correlated with the ratio of high-rise completions and population growth. This suggests that high-rise is the swing factor in the housing shortage.
Luxury Car Sales are Booming
But while some households are struggling, others (particularly wealthy ones ) are not. Luxury car sales have lifted to all time highs.
How Big is the Moon?
Finally, this is the continent of America mapped over the moon, to get a feel for how big (or small!) the moon actually is. American’s will use anything other than the metric system!
And that’s (pretty much) everything worth knowing in markets this week.
JG.