Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Thursday, 10 May 2012

Aussie unemployment comes in low at just 4.9%

Resulting in a jump in the dollar. This reduces the chances of another interest rate cut in June.

Below is a quick re-hash of an earlier post of mine on making sense of unemployment figures.

Interpreting unemployment figures

It is well known that employment figures are seen as a key economic indicator.

But what does an unemployment rate in 2012 of 5% in Australia really mean?  It sounds quite high, right?

Well, not really.  Countries have a natural rate of unemployment (known as the NAIRU) and for Australia it is a shade over 4%.

Unemployment should not really drop far below 4% for these four reasons:

1) Frictional unemployment - there is always a certain number of people moving between jobs and thus temporarily unemployed

2) Structural unemployment - e.g. those trained to work in industries that are become obsolescent

3) Seasonal unemployment - such as those who work in tourism or agriculture

4) Residual unemployment - economists might cruelly refer to this hard core of non-workers and "the great unemployable".  For varying reasons, some people have not adjusted to the modern capitalist world and will never work.  The same is true in all countries.

The reality is that at 5% unemployment, we're very lucky. Spain's unemployment rate is close to 25%, for example.

Source: The Economist