See the world through the eyes of an economist.
Jobs Market still a headache for RBA
The Aussie unemployment rate edged a small notch higher to 4.1% in January. It’s been holding around 4% for over a year now, and on the face of it, is still much tighter than the RBA would like.
Especially since jobs growth is strong too, now well clear of the pre-Covid trend.
And breaking that jobs growth down, it’s largely in full-time employment.
But wages growth remains tame
Despite the strength in the jobs market, wages growth remains very tame, falling from 3.5% to 3.2% in the December quarter. That’s soft, and coming off pretty quickly.
Part of that softness comes from the fact that people are not trading up to better paying jobs. The share of workers with their employer for less than six months continues to fall.
But households still feel the pain
That softness in the wages data will be little comfort to households. While annual inflation is coming down, prices in Australia are up a cumulative 19% on where they were pre-Covid.
Which means that real wages have collapsed close to 10%. And on the RBA’s current projections, are not set to recover until 2040! Ouch!
Owning the pipes
Finally, Amazon now reports that over 75% of Americans were using Amazon Prime in 2024. That dominance should be a little scary. Remember, Bezos said the aim was never to sell stuff. The aim was to own the pipes of commerce themselves.
And if one company owns all the pipes, you have a problem.
And that’s how the world looked through the eyes of an economist this week.
DB.