See the world through the eyes of an economist.
House prices fire the rockets
House prices rose a solid 0.5% in May, with strong growth across the capitals.
The trend is clearly upwards now, which we’d expect given recent rate cuts.
And given the strong results in the auction market recently, this pace of growth should probably accelerate from here.
Rate cuts are locked in
Speaking of rate cuts, markets now reckon there’s a 97% chance of rate cuts at the RBA’s July meeting. There’s even talk of a jumbo 50bps.
… But the economy is stalling
The case for rate cuts has been bolstered by the latest GDP data, which came in weaker than expected, and is now tracking below RBA forecasts.
The picture is much worse in per capita terms, which better reflects people’s lived experience of the economy.
Households are clearly struggling. Household consumption has collapsed, and the retail sector is struggling.
Do you need help with adulting?
Apparently, more and more Americans are turning to the internet for help with the basics of adulting. I can understand why people would search ‘how to file taxes’ but ‘how to use a hammer’?!? Are you ok, America?
And that’s how the world looked through the eyes of an economist this week.
DB.