See the world through the eyes of an economist: Rents, container rates and economic surprises.
These are the charts that caught my eye this week. First up, SQM research posted rental data for the March quarter. The exponential tilt seen since Covid times show no signs of abating. This is the median rental price level:
But when you turn that into annual growth data, we can see that the pace of change is moderating. The pace has come down on where it was in 2022, but still remains at historic highs.
Some interesting charts from CBA this week, looking at real household disposable income per capita – how much free cashflow we all have. Basically, in Australia, it’s falling quickly, putting us in stark contrast with the rest of the world.
In annual growth terms, we can see that while it is falling quickly in Australia, in most other countries it is growing. This is why household consumption is falling.
Inflation is the talk of the town again this week. On that front, container shipping costs have come down, after spiking during the early days of the conflict in the middle east. However, with things escalating, it will be interesting to see if this reverses course.
And part of the problem with inflation is that the economic data is too strong. Things are going too well. The World Economic Data Surprise Index shows that things have been considerably stronger than expected in recent times. This is proof that you can have too much of a good thing.
Finally, while the weekly news cycle tends to give you the impression that the world is going down the toilet, generally when you zoom out, you see that things are steadily getting better. For example, homicide rates in America have improved substantially in recent years, following an unusual tick up in 2020. Right now, things are about as good as they’ve ever been. Don’t give up on the world just yet.
And that’s how the world looked through the eyes of an economist this week.
DB.