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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Thursday, 15 September 2016

Inflection!

Inflection?

Yesterday the US Census Bureau reported that real household incomes had surged by 5.2 per cent between 2014 and 2015.

There is increasing speculation that interest rates may finally be at an inflection point as the US economy and jobs growth continue chugging along.

While interest rates won't be hiked in Australia any time soon with inflation tracking below the target band, it's been an interesting change of narrative.

Meanwhile the Reserve Bank of Australia seems to have adopted a more upbeat tone as it deems the worst of the drop in mining investment has passed.

Record employment withstands Brexit

Wasn't going to bother with another Anglo-themed post, but while on the theme of economies trying to escape from the zero lower bound here are the quickfire UK Labour Market charts for the three months to July 2016.

Total employment was up by +559,000 from a year ago to a record high of 31.77 million (with a three-month change of +174,000). No discernible impact from Brexit here. 


The employment rate remained at the joint highest level since comparable records began in 1971 at 74.5 per cent. Ditto.


The number of unemployed persons fell by 39,000 to 1.63 million, while the unemployment rate of 4.9 per cent was unchanged from the three months to June and well below the 5.5 per cent of a year ago. In the East of England the unemployment rate is now at its lowest ever level.


Annual earnings growth was one weaker point, ticking back to 2.3 per cent.



In a separate release yesterday the annual inflation rate was steady at +0.6 per cent as the UK tries to pull away from the risk of deflation. The lower pound resulting from Brexit will result in higher prices for import goods, and potentially a burst of inflation.


The wrap

It's early days but the UK economy appears to be demonstrating resilience in the face of the June Brexit referendum (the full impacts of which might be expected to be gradual).

Aussie Labour Force figures are due out this morning...