Arrivals rebounding fast
Overseas arrivals into Australia increased much, much faster than expected in July.
The revised figures for May and June were 650,500 and 730,300 respectively.
Meanwhile the provisional estimate ballooned to 1,083,240 for July, a huge increase and way ahead of what analysts had expected (admittedly with finger in the air estimates).
Of course, this remains well down on the record high for the month of July of more than 2 million arrivals which we saw in 2019, but it's certainly a hell of a lot better than the 87,000 (!) we saw the same time last year.
Source: ABS
Closer to pausing
This adds to the case for slowing down the pace of monetary tightening, for a couple of reasons.
Firstly, because the rapid acceleration in arrivals will soon help to ease labour force capacity constraints, especially as the international students and backpackers begin to pour back in to the country.
And secondly, because while the lack of ability to travel overseas was hugely stimulatory for Australia's economy up until the end of 2021 - as Aussie dollars were trapped at home to slosh around the consumption economy - this dynamic no longer holds true.
Now Aussies can travel abroad, and hailing one of the wealthiest nations per capita on earth, they are doing so en masse...and spending profusely as they do so on the evidence I've seen in Europe!
That's a timely boost for economic activity in Rome, Athens, Paris, Berlin, London, and Madrid, no doubt...not so much in Australia, though.
Noted Lord Pascoe of the Twitter shire:
The spate of new arrivals will put pressure on rental markets on rents, granted, but that could be solved quickly and easily enough: by letting landlords refinance /borrow again.
