Stuck in a rut
It's true that I've been whining about policy a lot - low grade Twitter discussion tends to drag one into it! - but it's desperately hard to see where the predicted stronger income growth is actually going to come from.
A 30-second look through yesterday's ABS releases underscores why, bearing in mind that NAIRU may well be about 4 per cent:
Unemployment rates are now rising in Sydney and Melbourne, and are already way high everywhere else.
Meanwhile the median duration of job search has jumped to 17 weeks, up from 14 weeks a year earlier.
And the annual average number of unemployed persons was back above 700,000 by the end of the 2019 calendar year, representing no progress at all from a year earlier.
It's tough, then, to see the forecast stronger wages growth with so much slack in the labour force, especially given the...
Terms of trade plunge
Export prices had a tremendous run through much of 2019, but plunged 5.2 per cent in the December quarter.
The index for coal and coke plummeted 14.7 per cent in the December quarter alone.
Q4 was ugly in this regard, but the beginning of 2020 could be much worse given recent trends in iron ore, natural gas, copper, and crude oil, all of which are plunging alongside a range of other commodity prices.
Just 31 days into calendar year 2020 and the Bloomberg commodity price index has just nudged a 47-month low.
The wrap
Some of the jobs data has held up better than might have been expected.
However, confidence and investment plans have been shredded, job ads are falling at a double digit pace, and the coronavirus and bushfires are going to drill a further gaping hole in already-anaemic growth.
Nicht so gut!
