ANALYSIS: Despite pockets of the economy being under financial stress, the RBA is conscious of other strengths that are keeping pressure on inflation and interest rates.
, according to the latest monthly data, far outpacing economists’ expectations for a modest gain of 17,500. The monthly data can be volatile but the jobs market remains extremely tight by historic standards with a very low unemployment rate of 3.6 per cent.Rising house prices is another. House prices jumped 1.2 per cent in May, the sharpest monthly increase since November 2021, according to data from CoreLogic.
Australia is looking more like the rest of the world in battling sticky inflation in the services sector, rising wages and price pressures. That’s despite household cash flow being crushed by the 4Investors and economists are becoming more attuned to the prospect that central banks will need to engineer a recession to return inflation back to targets.that unemployment would have to rise to about 4.5 per cent over the next 18 months, from 3.
UBS retail analysts have soured on some consumer discretionary retail stocks, advising clients to sell Harvey Norman, Super Retail Group, footwear and clothing retailer Accent Group and Premier Investments which owns Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans and Jacqui E. In its board meeting minutes this week, the Reserve Bank of Australia noted that household consumption growth had been subdued in the first half of 2023.
“Households’ excess savings is around 20 per cent of annualised household disposable income, suggesting that consumers have the firepower, should they need it,” Citi’s Faraz Syed and Josh Williamson said. Nonetheless, capital city house prices continue to storm higher despite 12 rate rises and signals from governor Philip Lowe that there are more to come.But mortgage delinquencies of 30 days or more for non-bank lenders have ticked up sharply in the past few months to about 2.3 per cent, from as low as 1.5 per cent last year, according to Coolabah Capital analysis of residential mortgage backed security portfolios.
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