Feels like recession
Central bankers tends to choose their words carefully, so when the Reserve Bank governor noted this week that some households may feel like they're in a recession, it naturally made a few media headlines.
Stock markets tend to be quite useful as forward-looking indicators, and the consumer discretionary index is down about -10 per cent over the past year.
Some recent trading updates have pointed to a potentially nasty slowdown in domestic demand ahead.
In related news, it was reported today the department store group David Jones has entered administration.
Separately, Canva announced that it will cut some 22 per cent of its workforce, noting that it's time for employees to get back into the office, with Sydney to become a more central hub for product teams.
AI and cost pressures will also see job cuts across banking and financial services deep into 2027.
Despite this, the central bank lifted interest rates to the highest level in 18 years yesterday, with a cash rate target of 4.85 per cent.
Still, despite the risks of a per capita recession, markets don't see interest rates coming back down for some time.
Source: ASX
To be sure, the oil price has been one major and unexpected source of headaches for the inflation picture.
But government expenditure has been another driver of demand, including for the NDIS, with public consumption as a share of nominal GDP soaring over recent years back towards the pandemic highs.
Some challenges and difficult decisions for the government ahead, then, as it tries to arrest a protracted downturn in polling popularity.
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