Latest news with #GSFM
Sky News AU
31-07-2025
- Business
- Sky News AU
GSFM's Stephen Miller calls on the RBA to 'press the accelerator' on rate cuts as unemployment rate rise looms
The Reserve Bank of Australia will have to 'press the accelerator' on interest rate cuts as an upcoming slump in public spending could cause the unemployment rate to rise, a leading economist has predicted. Some state and federal governments have signalled a slowdown in public spending which soared during and after the pandemic and kept many Australians in work. About four in five jobs created over the past two years have been in the non-market sector, which are industries influenced by government spending and regulation such as health, public services and education. Unemployment is forecast to pick up as government spending slows, putting pressure on the central bank's governor Michele Bullock to put more money back into Australians' pockets, GSFM's Stephen Miller said. 'Bullock will have to contend with a weakening labour market,' Mr Miller said on Business Now. 'Private sector spending here has been quite weak. What's held up the labour market has been growth and employment in the non-market sector, public administration, health, government related services. 'The market sector employment growth has been pretty tepid.' He said that public spending was going on a 'hiatus', putting pressure on the market sector to pick up the slack for Australia's jobs growth. This comes as inflation continued to fall in the June quarter, boosting hopes of a rate cut when the RBA meets in August. 'Now that inflation looks as though it's headed toward the centre of the (RBA's 2-3 per cent target) band, I think Michelle Bullock now has to maybe sort of press the accelerator a little on rate cuts,' Mr Miller said. 'She might have to pay more attention to the employment side of her mandate now that the inflation side looks to be under some control and that's not the circumstance.' The RBA controversially held rates in July, however, it is widely tipped to deliver a cut in August. Miller's comments come as Australia's unemployment rate continues to hover near historic lows, but it jumped 0.2 per cent above market expectations in June to 4.3 per cent. Recent research from the Centre for Independent Studies said that more than half of Australian voters rely on government for most of their income - through wages, benefits or subsidies. CIS economist Robert Carling warned that federal spending alone has reached 27.6 per cent of GDP. This was up from 24-25 per cent of GDP in 2012-13 and has been fuelled by a 'program expansion in social services, defence and debt interest'. While large government spending has driven the economy in recent years, Labor is now looking to boost Australia's productivity which has stalled over the past decade. Leaders across business, politics and unions will gather at the upcoming Economic Reform Roundtable where leading minds will attempt to conjure up a solution to the nation's lagging growth.
AU Financial Review
20-07-2025
- Business
- AU Financial Review
ASX futures down after record week
Australian shares are expected to open lower on Monday, with futures pointing to a 0.4 per cent drop for the S&P/ASX 200, trimming some of last week's 2.1 per cent gain – the local market's strongest weekly performance since May. Wall Street ended mixed on Friday as earnings results disappointed and concerns grew over Donald Trump's push for new tariffs on European goods. The Dow fell 142 points, while the S&P 500 was flat and the Nasdaq edged higher. Back home, attention turns to the Reserve Bank of Australia, with Tuesday's meeting minutes and a Thursday speech from governor Michele Bullock set to shape expectations ahead of the August board meeting. Markets had been pricing in a rate cut this month, but were caught off guard when the RBA held steady at 3.85 per cent. A jump in the unemployment rate, from 4.1 to 4.3 per cent, has since added weight to the case for easing. 'If markets can get their head around the fact that a rate cut is more likely than not, and Michele Bullock is seen to keep the door open to that this week, then markets may well continue on their merry way,' said Stephen Miller, an investment strategy adviser at GSFM. This week's agenda Minutes from the RBA's shock decision to hold rates at 3.85 per cent will be released on Tuesday, before Bullock delivers a major speech in Sydney on Thursday. A string of results from US companies will be announced this week including those from Alphabet, Tesla, Honeywell, Lockheed Martin, Northrop Grumman and General Motors. Locally, company earnings will be released from the likes of AMP, Woodside Energy, Fortescue and Whitehaven.
The Age
21-04-2025
- Business
- The Age
Markets on ‘Trump watch', braced for recession risk as ASX tipped to steady
A shortened week of relative calm is expected on the Australian sharemarket but traders will be on 'Trump watch' as they digest the prospect of a global recession resulting from the US president's erratic approach to economic policy. The Australian sharemarket closed higher on Thursday, buoyed by energy stocks, gold miners and consumer staples. The ASX was closed on the Good Friday and Easter Monday public holidays and this week will open for three days of trading, closing on Friday for Anzac Day. 'I suspect, as we have been for the last month or two, we'll be on Trump watch,' says Stephen Miller, investment strategy consultant at GSFM. 'We have seen some mitigation of the 'Liberation Day' announcements. But they've been just that – mitigation, not eradication,' Miller says. Companies and investors are grappling with an aggressive tariff landscape poised to keep shifting and fuelling worries about a recession as US President Donald Trump's administration negotiates with a range of countries. While he has paused some of the heftiest levies on imports, the US is also locked in an escalating trade battle with China, the world's second-largest economy. Beijing warned nations against making trade agreements with Washington that hurt China, highlighting how economies around the world risk getting caught up in tensions between the two powerhouses. Loading US Vice President J.D. Vance arrives in New Delhi on Tuesday (AEST) as the US threatens to increase the 10 per cent tariffs on Indian exports to 26 per cent if no deal is reached by the end of the 90-day pause Trump put in place this month. 'The prospects of a global recession are growing, and I think they're trying to calibrate what that might imply for markets. Personally, I'm a little on the pessimistic side. I suspect that the prospects of a recession this year are greater than 50 per cent,' Miller says. Closer to home, preliminary April PMI data for Australia will be released on Wednesday. These reports will provide an initial look at the impact of reciprocal tariffs on manufacturing and services sectors.
Sydney Morning Herald
21-04-2025
- Business
- Sydney Morning Herald
Markets on ‘Trump watch', braced for recession risk as ASX tipped to steady
A shortened week of relative calm is expected on the Australian sharemarket but traders will be on 'Trump watch' as they digest the prospect of a global recession resulting from the US president's erratic approach to economic policy. The Australian sharemarket closed higher on Thursday, buoyed by energy stocks, gold miners and consumer staples. The ASX was closed on the Good Friday and Easter Monday public holidays and this week will open for three days of trading, closing on Friday for Anzac Day. 'I suspect, as we have been for the last month or two, we'll be on Trump watch,' says Stephen Miller, investment strategy consultant at GSFM. 'We have seen some mitigation of the 'Liberation Day' announcements. But they've been just that – mitigation, not eradication,' Miller says. Companies and investors are grappling with an aggressive tariff landscape poised to keep shifting and fuelling worries about a recession as US President Donald Trump's administration negotiates with a range of countries. While he has paused some of the heftiest levies on imports, the US is also locked in an escalating trade battle with China, the world's second-largest economy. Beijing warned nations against making trade agreements with Washington that hurt China, highlighting how economies around the world risk getting caught up in tensions between the two powerhouses. Loading US Vice President J.D. Vance arrives in New Delhi on Tuesday (AEST) as the US threatens to increase the 10 per cent tariffs on Indian exports to 26 per cent if no deal is reached by the end of the 90-day pause Trump put in place this month. 'The prospects of a global recession are growing, and I think they're trying to calibrate what that might imply for markets. Personally, I'm a little on the pessimistic side. I suspect that the prospects of a recession this year are greater than 50 per cent,' Miller says. Closer to home, preliminary April PMI data for Australia will be released on Wednesday. These reports will provide an initial look at the impact of reciprocal tariffs on manufacturing and services sectors.
