See the world through the eyes of an economist.
Is the economy about to pop?
The GDP data came in a bit hotter than expected yesterday, driving by a rebound in consumer spending. Annual growth was up to 1.8%, vs the 1.6% forecast by the RBA. With the stronger than expected inflation data a couple of weeks ago, this makes another rate cut in September unlikely. We’ll have to wait til November.
GDP per capita grew for the first time in a long time in the June quarter.
House prices clearly accelerating
National house prices grew 0.7% in the month of August. All the capitals are clearly accelerating now.
Rental market tightens (the screws)
After easing in 2024, rental vacancy rates are tightening across the country, with all cities at historically low levels.
This is pushing up rents, and rental price growth is accelerating again.
AI won’t charge growth til 2030
A recent study found that the time lag between an innovation and when that innovation shows up in the productivity data is falling. It took 61 years for the steam engine to fire up economic growth. It will take AI 7 years. That’s quick, but we’re still left waiting til after 2030 to justify current stock market valuations.
And that’s how the world looked through the eyes of an economist this week.
DB.