February 28, 2024 by Dymphna

Auctions point to an even bigger boom: the economy in pictures

See the world through the eyes of an economist: auctions, global house prices, wages and the gender pay gap.

This is what caught my eye this week. First up, auctions continue to run hot, and auction clearance rates (how many resulted in a successful sale) continue to boom. When you map this against house price growth, it suggests that price growth should accelerate further from here.

The housing rebound seems to be consolidating around the world. Australia’s property market tends to move closely with other developed markets, since they’re driven by many of the same factors. There’s comfort in this, since it gives us more confidence that the ongoing recovery has substance.

We got wages data last week, which showed the Wage Price Index accelerating to 15 year high. Importantly, it came in above inflation, which means that real wages are growing again.

However, before we break out the bubbly, it’s worth noting that measures of labour under-utilisation (a broader measure than unemployment), suggests that wage growth has probably topped out, and we shouldn’t really expect it to go much higher from here.

Speaking of wages, we also got a report on the gender pay-gap this week. On average, men still earn more than women, but the gap is closing, down from 18% in 2014 to 12% in 2023.

This has more to do with women’s career trajectories, and the time they take off to work for the family, rather than inherent bias within jobs. Still, it’s not ideal to punish women financial for taking time to care for the kids.

The solution? Pay women for the work they do at home. I rekcon. Somebody look into it.

And that’s how the world looks through the eyes of an economist this week.