by Stephen Roberts | Jul 14, 2014 | Economic Weekly, Laminar Economist Stephen Roberts
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Whether the softer patch in the labour market over the past month or two stays soft, or takes a turn for the better over coming months is likely to hold the key to the outlook for Australian interest rates. The first reason why the outlook for the labour market has become so important is that the household sector will need to be doing the initial heavy lifting if the economy is to successfully rebalance economic growth drivers as mining investment spending falls. If households are to perform this task by spending more, they will need to be confident that their income is not under threat. This is where a strong labour market comes in; providing the comfort that, even in the event of unemployment, jobs are relatively easy to come by.
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by Stephen Roberts | Jul 7, 2014 | Economic Weekly, Laminar Economist Stephen Roberts
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Risk assets showed a mixed performance in June partly reflecting variations in the economic outlook. During June, the US economy showed further signs of rebounding strongly from its severe winter-weather induced slowdown in Q1. The jury was still out on whether China’s growth moderation would continue, and sharply declining iron ore prices compounded concern about how well the Australian economy might rebalance from mining investment led growth. Growth in Europe also seemed to fade while, on the positive side, policy measures to boost growth in Japan seemed to be starting to gain traction. Major equity markets responded to the differences in economic performance and the US S&P 500 and Japan’s Nikkei both rose strongly by 1.9% and 3.6% respectively in the month. European markets, however, were weaker and the German DAX and British FTSE 100 fell by 1.1% and 1.5% respectively. The Australian equity market was weakest of the majors in June and the ASX 200 fell by 1.8%.
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