See the world through the eyes of an economist: Jobs, spending and gas.
These are the charts that caught my eye this week. First up, strong employment growth has put a rate hike on the table for August. But when you dig into it, employment growth is entirely in the public sector, with the market sector posting no growth. That is, the economy isn’t strong enough to generate jobs right now.
It’s worse when you look at hours worked, with hours worked in the private sector already falling.
Not only that, the number of employers planning on recruiting continues to fall. There’s more labour market weakness ahead.
The CBA Household Spending indicator (HIS) shows that there remains a large disconnect between those who own their home, and those that don’t. With rents growing strongly, disposable income in rental households is being squeezed, and consumption spending is flat.
And with home ownership correlated with age, it’s not surprising to see that there’s a clear connection between how much more you’re spending right now and how old you are.
It’s the same story with consumer confidence. Renters are much less confident than other households, although nobody is having much fun right now.
One of the things holding up inflation at the moment is electricity prices, and electricity prices are rising because there’s supposedly a gas shortage. Worth remembering that this is rubbish. We have a lot of gas. We just export it (… to Japan and China who were recently found to be reselling it for a profit.)
Finally, in the latest chapter in AI destroys humanity, global data centres now consume more energy than most countries. Only 16 countries consume more. Totally worth it for the cool pictures though.
And that’s how the world looked through the eyes of an economist this week.
DB.