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Australia Labour Market (Jul.)

The further decline in the unemployment rate in July may not last long, but it should be more than enough to convince the RBA to proceed with its plans to taper asset purchases in September.
Ben Udy Australia and New Zealand Economist
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Australia & New Zealand Economics Weekly

Housing downturn to weigh on activity

The housing downturn is now in full swing. While that hasn’t prevented a solid rise in consumption in Q2, we think falling wealth will be a drag on consumer spending next year. What’s more, our forecast that house prices will eventually fall 15% from their April peak would be consistent with dwelling investment falling sharply in the coming years. The upshot is that the housing downturn will bring the Australian economy close to recession next year.

1 July 2022

Australia & New Zealand Data Response

Australia CoreLogic House Prices (Jun.)

The monthly decline in house prices in June was the largest since 2019 but is unlikely to be the sharpest decline in the current downturn. We think house prices will eventually fall by 15% from their April peak, which will weigh heavily on GDP growth next year.

1 July 2022

Australia & New Zealand Data Response

Australia Retail Sales (May 2022)

The strong rise in retail sales in May highlights the strength in the Australian economy and is consistent with our view that the RBA will continue to hike rates aggressively in the months ahead.

29 June 2022

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Australia & New Zealand Economics Update

RBNZ ready to lift rates when restrictions ease

The RBNZ sounded hawkish when it left rates on hold today, but the decision demonstrates that the Bank is taking a cautious approach in light of the current lockdown. Assuming restrictions can be eased before long we still expect the Bank to hike rates to 1.0% by the end of the year.

18 August 2021

Australia & New Zealand Economics Weekly

Vaccine roll-out accelerating as activity stalls

The outbreak of the Delta variant in Australia has continued to worsen. More states are now in lockdown and sentiment is deteriorating. That poses a downside risk to our Q3 GDP forecast. However the vaccine rollout continues to accelerate, which should allow Australia to lift domestic restrictions by the middle of Q4. That's why we think Australia will avoid another recession.

13 August 2021

RBNZ Watch

RBNZ set to hike rates by 50 basis points

The New Zealand economy is clearly overheating and the Bank’s mandates for both inflation and the labour market are now fulfilled. We therefore expect the RBNZ to hike the OCR by 50bps at its upcoming meeting on Wednesday 18th August. And with the unemployment rate likely to fall further, and inflation set to remain above the mid-point of the Bank’s target we think the Bank will hike rates to 1.50% by the middle of next year.

11 August 2021
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