3 million underemployed
The interest rate hiking cycle is breaking the back of the Aussie consumer and jobs market, even if it hasn't fully shown up in official data yet.
Roy Morgan reported that 3 million Aussies are now unemployed or underemployed, a 3-year high.
I've stopped tracking the RM figures quite so closely, but Justin Fabo has mapped them out against the official ABS figures and it looks like there's some catching up to be done here, with the ABS still reporting a very low seasonally adjusted unemployment rate of only 3.6 per cent.
Of course, it's been an extremely wild ride over the past few years, and Fabo posits that one possible explanation is that the estimates of the size of the labour force haven't yet caught up to the reality.
As further evidence, Fabo cites the ratio of job applications to job advertisements, which is pointing towards a higher number of unemployed persons in the country than the official seasonally adjusted figure of only 521,700.
Alternatively, rising wages may be pulling forward job applications, or the return of international students is accounting for the surge in applications...or maybe there's just a lag in the trend data, who knows?
Source: Justin Fabo, Macquarie
Shane Oliver of AMP reports that inflation in the pipeline in Australia is now plunging towards zero, following similar findings from the Melbourne Institute's inflation gauge over the past 3 months.
Source: Shane Oliver, AMP
We're seeing more reports of countries elsewhere seeing inflation drop back towards zero, and in some cases turning into deflation.
Denmark was the latest example today, suggesting that the Eurozone will need to turn to face the new dovish reality in due course.
Globally food prices continue to ease.
Source: EvercoreISI
In other Aussie news, more building and construction companies are failing, while the huge pipeline of infrastructure projects and works is taking capacity away from housing construction, and has forced up costs to make apartment projects unfeasible.
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