Record low unemployment
Greater Sydney's economy continued to add jobs at a remarkable, thunderous pace throughout 2018, with total employment up by a rip-roaring 100,000 over the year to November.
That's more than a third of all new jobs created in Australia on a net basis over that time.
The media is all about traffic congestion, light rail delays, and falling house prices in the harbour city, but meanwhile the unemployment rate quietly fell to just 3½ per cent in November 2018 (not reported anywhere, as far as I could tell!). <Edit: M. Pascoe at The New Daily covered it>.
Interestingly, that's now the lowest monthly unemployment rate figure on record for Sydney, a dynamic which can happen at the tail-end of a monster construction boom.
On an annual average basis, Sydney's unemployment rate is now down to only 4.3 per cent, while Melbourne has been the biggest improver of recent times, and Adelaide has recovered nicely from a sticky patch.
These are backwards-looking indicators, of course, but still those are some healthy results in the two largest capital cities.
As the labour force grows there will be more unemployed persons in absolute terms over time; but the latest ABS figures showed that some inroads have been made here.
In fact the trend rate of unemployment is at the lowest level in 7 years at 5.1 per cent, with the total number of unemployed persons down by -34,000 over the year to November 2018, overwhelmingly driven by Victoria (-41,000), and New South Wales (-9,000), offset by some mild increases elsewhere.
Awesome analysis by Justin Smirk of Westpac has shown how underutilisation rates have tightened in the two most populous states, to levels which in the past have resulted in private sector wages growth of at least 3 per cent (and quite possibly nearer 3½ per cent).
With the labour market on a strong run in towards the end of the calendar year the latest available monthly figures show that seasonally adjusted underutilisation rates have been as low as 12 per cent in New South Wales, implying that wages growth might even be aiming towards the higher end of that range next year.
If this scenario plays out then household debt to disposable income ratios will decline pleasingly in the new lending environment (fewer interest-only loans, lower average loan sizes, and slower volumes).
Mortgage serviceability, perhaps surprisingly, could feasibly hit its best level in three decades in Sydney as dwelling prices fall, though saving a deposit hasn't gotten any easier.
But banks must keep credit flowing at a reasonable level for these improvements to continue, a point that Frydenberg seems to be raising in increasingly shrill tones.
Mortgage serviceability, perhaps surprisingly, could feasibly hit its best level in three decades in Sydney as dwelling prices fall, though saving a deposit hasn't gotten any easier.
But banks must keep credit flowing at a reasonable level for these improvements to continue, a point that Frydenberg seems to be raising in increasingly shrill tones.
