Thursday, May 16, 2019

Jobless rate rises, rate cut bets firm

Australia's official jobless rate has crept higher adding to speculation that the Reserve Bank will be forced to cut interest rates. 

In April, unemployment rose to 5. 2 percent in the face of stronger than expected jobs growth. 

The data comes days out from the election where both major parties have laid claim to being strong economic managers. 

ABC's Peter Ryan says the RBA now has the trigger to cut the cash rate in June.

Wednesday, May 15, 2019

Wages growth fails to pick up as stagnating pay defies budget forecasts

Wage growth remains stuck around historically low levels, with workers receiving annual pay increases averaging 2.3 per cent. 

The ABS wage price index rose 0.5pc in the March quarter, below analysts forecasts centred on 0.6pc. 

Annual wage growth was stuck at 2.3pc for the third quarter in a row. 

ABC's Peter Ryan says stagnating wages contradict budget projections that wages growth will eventually return to 3.25pc. 

Monday, May 13, 2019

Govt housing help can mean higher real estate prices, NZ economist warns

Efforts by the New Zealand government to help first home owners with lower deposits can result in high real estate prices, according to the NZ Institute of Economic Research. 

Principal economist Christina Leung says in a rising market, government assistance can have unintended consequences.

Negative equity a risk under Coalition housing deposit plan to underwrite 5 percent deposits for first time borrowers, warns economist Stephen Koukoulas

Economist Stephen Koukoulas warns Scott Morrison's housing deposit scheme runs the risk that borrowers might fall into "negative equity" if the real estate correction worsens. 

Mr Koukoulas tells ABC's Peter Ryan that the scheme comes as banks are tightening lending standards and could create "moral hazard" if borrowers think they will ultimately be bailed out by taxpayers.