Bullish ASX investors shouldn't ignore RBA warning
The Reserve Bank's Statement of Monetary Policy, released as the RBA cut rates by 0.25 per cent to 3.85 per cent, the lowest level since May 2023, contains the word 'uncertain' 134 times.
At her post-decision press conference on Tuesday afternoon, governor Michele Bullock went further, explaining that the environment was not just uncertain but also unpredictable; scenarios released on Tuesday suggest everything from a relatively benign outcome of a modest decline in global growth that puts downward pressure on both GDP growth and inflation (the central bank's base case) to a trade war scenario that smacks growth and causes deflation, to a trade peace scenario which is positive for growth, but also reignites inflation concerns.
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Sydney Morning Herald
16 hours ago
- Sydney Morning Herald
More young Australians working multiple jobs to survive
A record number of young Australians are working more than one part-time job to make ends meet as signs emerge the overall jobs market is starting to soften under the weight of the Reserve Bank's efforts to bring down inflation. Figures from the Australian Bureau of Statistics show the number of people with multiple jobs eased through the first three months of this year, while the proportion of workers getting more than one pay cheque has dropped to a three-year low. The number of Australians with more than one job soared in the wake of COVID pandemic. Between the end of 2019 and December last year, an extra 220,000 people took on at least one additional job, a near-29 per cent increase. The end of the JobKeeper wage subsidy program, a shortage of workers for many industries, and the surge in inflation, combined to encourage people to take on a sideline job to supplement their income. The ABS figures revealed that after peaking at 990,000 at the end of the last year, the number of multiple-job holders eased to 963,000. Almost all of that decline was due to people with a full-time job leaving a part-time gig. But among those in part-time work, the number taking on an extra part-time job lifted. There are now a record 490,200 people with at least two part-time jobs, a 6 per cent increase over the past 12 months. Those part-time jobs are being held down by women at record levels and by people under the age of 24. In 1996, 18.2 per cent of people with multiple jobs were those aged under 24. That proportion has now climbed to 21.8 per cent, while the share of middle-aged Australians with more than one job has eased.
The Age
16 hours ago
- The Age
More young Australians working multiple jobs to survive
A record number of young Australians are working more than one part-time job to make ends meet as signs emerge the overall jobs market is starting to soften under the weight of the Reserve Bank's efforts to bring down inflation. Figures from the Australian Bureau of Statistics show the number of people with multiple jobs eased through the first three months of this year, while the proportion of workers getting more than one pay cheque has dropped to a three-year low. The number of Australians with more than one job soared in the wake of COVID pandemic. Between the end of 2019 and December last year, an extra 220,000 people took on at least one additional job, a near-29 per cent increase. The end of the JobKeeper wage subsidy program, a shortage of workers for many industries, and the surge in inflation, combined to encourage people to take on a sideline job to supplement their income. The ABS figures revealed that after peaking at 990,000 at the end of the last year, the number of multiple-job holders eased to 963,000. Almost all of that decline was due to people with a full-time job leaving a part-time gig. But among those in part-time work, the number taking on an extra part-time job lifted. There are now a record 490,200 people with at least two part-time jobs, a 6 per cent increase over the past 12 months. Those part-time jobs are being held down by women at record levels and by people under the age of 24. In 1996, 18.2 per cent of people with multiple jobs were those aged under 24. That proportion has now climbed to 21.8 per cent, while the share of middle-aged Australians with more than one job has eased.
The Advertiser
a day ago
- The Advertiser
Businesses and consumers caught between opposing forces
Will a second rate cut be enough to settle the nerves of businesses and consumers spooked by global trade uncertainty? Donald Trump's tariffs have weighed on sentiment in recent months, stifling an expected economic recovery in 2025. Household confidence spiked following the Reserve Bank's first interest rate reduction in February but the prospect of a global economic slowdown brought about by the US president's trade war wiped away those gains. Westpac and the Melbourne Institute will release the June update to their consumer sentiment index on Tuesday. Despite a de-escalation in trade tensions between the US and China, uncertainty remains high. In the central bank board's May minutes, the word uncertainty was used 21 times - almost double the figure in April. But another rate cut by the RBA last month could at least provide a much-needed boost to consumer spirits, after spending was slower than expected in the first few months of the year. Following the May board meeting, Reserve Bank governor Michele Bullock said there was a downside risk to the economy if households remained more cautious than they had been during past rate easing cycles. Subdued consumption was having a flow-on effect for businesses, which are battling with relatively low spending while unit labour costs remain high. Household spending rose just 0.1 per cent in April, cancelling out a 0.1 per cent fall the previous month, the Australian Bureau of Statistics reported on Thursday. NAB's business survey, also to be released on Tuesday, will be closely watched for signs of how the last month of tariff turbulence and interest rate reductions have impacted firms' investment plans. "Capex and forward orders indicators will be key to deducing how business decisions and demand have been impacted by global growth uncertainty," ANZ Bank senior economist Adelaide Timbrell said in a research note. Capital expenditure fell 0.1 per cent in the March quarter, with spending on equipment and machinery dipping a worrying 1.3 per cent. Australia desperately needs businesses to invest more in the sort of capital that can help boost anaemic productivity growth. In NAB's last business survey, capex fell sharply by six index points while forward orders were also weak. With little in the way of hard economic data on offer domestically, investors will cast their eyes offshore to US inflation data on Wednesday and Thursday. "Tariffs have yet to meaningfully impact published CPI data to date," said ANZ economists Tom Kenny and Shwetha Sunilkumar. "We think May's CPI data will show some of the increased cost pressures facing businesses being passed onto consumers, particularly via higher goods prices." The US central bank has remained cautious, keeping rates on hold at 4.25 per cent since December and has so far resisted Mr Trump's demands to drop them. If inflation remains subdued, the Fed could eventually be reassured enough to resume its easing cycle. Wall Street closed higher on Friday after a better-than-expected jobs report calmed worries about the economy, while Tesla bounced, clawing back some previous session losses. The S&P 500 closed above 6000 for the first time since February 21, fuelled by gains in technology shares. Australian share futures moved up 29 points, or 0.34 per cent, to 6226. The S&P/ASX200 traded a tight range on Friday to finish 23.2 points lower, down 0.27 per cent to 8,515.7, as the broader All Ordinaries slipped 26.7 points, or 0.3 per cent, to 8,741.9. Will a second rate cut be enough to settle the nerves of businesses and consumers spooked by global trade uncertainty? Donald Trump's tariffs have weighed on sentiment in recent months, stifling an expected economic recovery in 2025. Household confidence spiked following the Reserve Bank's first interest rate reduction in February but the prospect of a global economic slowdown brought about by the US president's trade war wiped away those gains. Westpac and the Melbourne Institute will release the June update to their consumer sentiment index on Tuesday. Despite a de-escalation in trade tensions between the US and China, uncertainty remains high. In the central bank board's May minutes, the word uncertainty was used 21 times - almost double the figure in April. But another rate cut by the RBA last month could at least provide a much-needed boost to consumer spirits, after spending was slower than expected in the first few months of the year. Following the May board meeting, Reserve Bank governor Michele Bullock said there was a downside risk to the economy if households remained more cautious than they had been during past rate easing cycles. Subdued consumption was having a flow-on effect for businesses, which are battling with relatively low spending while unit labour costs remain high. Household spending rose just 0.1 per cent in April, cancelling out a 0.1 per cent fall the previous month, the Australian Bureau of Statistics reported on Thursday. NAB's business survey, also to be released on Tuesday, will be closely watched for signs of how the last month of tariff turbulence and interest rate reductions have impacted firms' investment plans. "Capex and forward orders indicators will be key to deducing how business decisions and demand have been impacted by global growth uncertainty," ANZ Bank senior economist Adelaide Timbrell said in a research note. Capital expenditure fell 0.1 per cent in the March quarter, with spending on equipment and machinery dipping a worrying 1.3 per cent. Australia desperately needs businesses to invest more in the sort of capital that can help boost anaemic productivity growth. In NAB's last business survey, capex fell sharply by six index points while forward orders were also weak. With little in the way of hard economic data on offer domestically, investors will cast their eyes offshore to US inflation data on Wednesday and Thursday. "Tariffs have yet to meaningfully impact published CPI data to date," said ANZ economists Tom Kenny and Shwetha Sunilkumar. "We think May's CPI data will show some of the increased cost pressures facing businesses being passed onto consumers, particularly via higher goods prices." The US central bank has remained cautious, keeping rates on hold at 4.25 per cent since December and has so far resisted Mr Trump's demands to drop them. If inflation remains subdued, the Fed could eventually be reassured enough to resume its easing cycle. Wall Street closed higher on Friday after a better-than-expected jobs report calmed worries about the economy, while Tesla bounced, clawing back some previous session losses. The S&P 500 closed above 6000 for the first time since February 21, fuelled by gains in technology shares. Australian share futures moved up 29 points, or 0.34 per cent, to 6226. The S&P/ASX200 traded a tight range on Friday to finish 23.2 points lower, down 0.27 per cent to 8,515.7, as the broader All Ordinaries slipped 26.7 points, or 0.3 per cent, to 8,741.9. Will a second rate cut be enough to settle the nerves of businesses and consumers spooked by global trade uncertainty? Donald Trump's tariffs have weighed on sentiment in recent months, stifling an expected economic recovery in 2025. Household confidence spiked following the Reserve Bank's first interest rate reduction in February but the prospect of a global economic slowdown brought about by the US president's trade war wiped away those gains. Westpac and the Melbourne Institute will release the June update to their consumer sentiment index on Tuesday. Despite a de-escalation in trade tensions between the US and China, uncertainty remains high. In the central bank board's May minutes, the word uncertainty was used 21 times - almost double the figure in April. But another rate cut by the RBA last month could at least provide a much-needed boost to consumer spirits, after spending was slower than expected in the first few months of the year. Following the May board meeting, Reserve Bank governor Michele Bullock said there was a downside risk to the economy if households remained more cautious than they had been during past rate easing cycles. Subdued consumption was having a flow-on effect for businesses, which are battling with relatively low spending while unit labour costs remain high. Household spending rose just 0.1 per cent in April, cancelling out a 0.1 per cent fall the previous month, the Australian Bureau of Statistics reported on Thursday. NAB's business survey, also to be released on Tuesday, will be closely watched for signs of how the last month of tariff turbulence and interest rate reductions have impacted firms' investment plans. "Capex and forward orders indicators will be key to deducing how business decisions and demand have been impacted by global growth uncertainty," ANZ Bank senior economist Adelaide Timbrell said in a research note. Capital expenditure fell 0.1 per cent in the March quarter, with spending on equipment and machinery dipping a worrying 1.3 per cent. Australia desperately needs businesses to invest more in the sort of capital that can help boost anaemic productivity growth. In NAB's last business survey, capex fell sharply by six index points while forward orders were also weak. With little in the way of hard economic data on offer domestically, investors will cast their eyes offshore to US inflation data on Wednesday and Thursday. "Tariffs have yet to meaningfully impact published CPI data to date," said ANZ economists Tom Kenny and Shwetha Sunilkumar. "We think May's CPI data will show some of the increased cost pressures facing businesses being passed onto consumers, particularly via higher goods prices." The US central bank has remained cautious, keeping rates on hold at 4.25 per cent since December and has so far resisted Mr Trump's demands to drop them. If inflation remains subdued, the Fed could eventually be reassured enough to resume its easing cycle. Wall Street closed higher on Friday after a better-than-expected jobs report calmed worries about the economy, while Tesla bounced, clawing back some previous session losses. The S&P 500 closed above 6000 for the first time since February 21, fuelled by gains in technology shares. Australian share futures moved up 29 points, or 0.34 per cent, to 6226. The S&P/ASX200 traded a tight range on Friday to finish 23.2 points lower, down 0.27 per cent to 8,515.7, as the broader All Ordinaries slipped 26.7 points, or 0.3 per cent, to 8,741.9. Will a second rate cut be enough to settle the nerves of businesses and consumers spooked by global trade uncertainty? Donald Trump's tariffs have weighed on sentiment in recent months, stifling an expected economic recovery in 2025. Household confidence spiked following the Reserve Bank's first interest rate reduction in February but the prospect of a global economic slowdown brought about by the US president's trade war wiped away those gains. Westpac and the Melbourne Institute will release the June update to their consumer sentiment index on Tuesday. Despite a de-escalation in trade tensions between the US and China, uncertainty remains high. In the central bank board's May minutes, the word uncertainty was used 21 times - almost double the figure in April. But another rate cut by the RBA last month could at least provide a much-needed boost to consumer spirits, after spending was slower than expected in the first few months of the year. Following the May board meeting, Reserve Bank governor Michele Bullock said there was a downside risk to the economy if households remained more cautious than they had been during past rate easing cycles. Subdued consumption was having a flow-on effect for businesses, which are battling with relatively low spending while unit labour costs remain high. Household spending rose just 0.1 per cent in April, cancelling out a 0.1 per cent fall the previous month, the Australian Bureau of Statistics reported on Thursday. NAB's business survey, also to be released on Tuesday, will be closely watched for signs of how the last month of tariff turbulence and interest rate reductions have impacted firms' investment plans. "Capex and forward orders indicators will be key to deducing how business decisions and demand have been impacted by global growth uncertainty," ANZ Bank senior economist Adelaide Timbrell said in a research note. Capital expenditure fell 0.1 per cent in the March quarter, with spending on equipment and machinery dipping a worrying 1.3 per cent. Australia desperately needs businesses to invest more in the sort of capital that can help boost anaemic productivity growth. In NAB's last business survey, capex fell sharply by six index points while forward orders were also weak. With little in the way of hard economic data on offer domestically, investors will cast their eyes offshore to US inflation data on Wednesday and Thursday. "Tariffs have yet to meaningfully impact published CPI data to date," said ANZ economists Tom Kenny and Shwetha Sunilkumar. "We think May's CPI data will show some of the increased cost pressures facing businesses being passed onto consumers, particularly via higher goods prices." The US central bank has remained cautious, keeping rates on hold at 4.25 per cent since December and has so far resisted Mr Trump's demands to drop them. If inflation remains subdued, the Fed could eventually be reassured enough to resume its easing cycle. Wall Street closed higher on Friday after a better-than-expected jobs report calmed worries about the economy, while Tesla bounced, clawing back some previous session losses. The S&P 500 closed above 6000 for the first time since February 21, fuelled by gains in technology shares. Australian share futures moved up 29 points, or 0.34 per cent, to 6226. The S&P/ASX200 traded a tight range on Friday to finish 23.2 points lower, down 0.27 per cent to 8,515.7, as the broader All Ordinaries slipped 26.7 points, or 0.3 per cent, to 8,741.9.
