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Speaker 1: Welcome to Fair and Greed the week Ahead. I'm Sean Aylmer,

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Speaker 1: and as always I'm joined at this time on a

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Speaker 1: Monday morning by economist Stephen Caculis. You'll find team at

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Speaker 1: the cook dot com and our next using the handle

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Speaker 1: the Kirk. Stephen.

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Speaker 2: Good morning, very good morning, Sean.

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Speaker 1: We had so much information last week, we had national accounts,

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Speaker 1: retail figures, building approvals, house prices. Where do we stand

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Speaker 1: at the end of that week?

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Speaker 2: Look at the end of the week, I think it's

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Speaker 2: fair to say that the bulk of the domestic numbers

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Speaker 2: coming out were either okay or even dare I say

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Speaker 2: quite good? And is it nice to be talking about

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Speaker 2: better news on the rad of economic growth? So in

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Speaker 2: no particular order GDP. Yes, it's looking in the review

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Speaker 2: mirror of the economy, but of course it's a quarterly

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Speaker 2: update on where we were ap point six percent increasing

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Speaker 2: GDP in the December quarter, the fastest growth that we've

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Speaker 2: seen in two years. It comes after a series of

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Speaker 2: point ones and point two so it's nice to get

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Speaker 2: a point six and you'll growth ticked up to one

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Speaker 2: point three percent. So as the Treasurer said, yeah, this

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Speaker 2: could well be just the turning point, not to a

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Speaker 2: booming economy, but just that that bleeding that we'd seen

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Speaker 2: over the last couple of years might be coming to

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Speaker 2: an end. And you know, the bottom line GDPNU was

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Speaker 2: looking a little bit better. That was supplemented by well,

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Speaker 2: my favorite number for last week was actually the building

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Speaker 2: of proved six point three percent cracker. The supply side

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Speaker 2: is working. I love it when economics works. It does sometimes,

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Speaker 2: you know. So we've got the shortage of housing being

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Speaker 2: addressed by construction companies and individuals saying I want to

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Speaker 2: build a new house, so either up six percent or

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Speaker 2: a new apartment. In this case, there was a very

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Speaker 2: heavy skewing to apartments, but even so it's a dwelling.

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Speaker 2: So up six percent in the month, and up a

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Speaker 2: staggering twenty seven percent from the low point in February

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Speaker 2: last year. And this is before obviously, the interest rate

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Speaker 2: cup effects kick in, and before some of those what

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Speaker 2: we call them sweeteners at the federal government's giving the

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Speaker 2: local government sector to fast track approval and rezoning, those

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Speaker 2: things that Peter Chillip, the excellent housing economist, talks about

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Speaker 2: all the time. That's really just sort of starting to

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Speaker 2: kick in, so maybe, just maybe this is the turning

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Speaker 2: point in the house dwelling construction cycles, something that we

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Speaker 2: desperately need. And then to round out a little bit

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Speaker 2: of better good news, retail sales plus point three, so

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Speaker 2: again not boomingham that comes after a bit of a

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Speaker 2: weak result in December, but it's nice to have a

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Speaker 2: plus sign.

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Speaker 1: What about I mean, how's this? What's it mean for

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Speaker 1: interest rates? Because we've had one rate cut, but all

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Speaker 1: this data has taken well before then, and maybe the

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Speaker 1: Reserve Bank is allowed to be cautious on any further

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Speaker 1: rate cuts because it's not dragging on the economy quite

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Speaker 1: as much.

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Speaker 2: Look, and that's the big question. And Deputy Government Andrew

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Speaker 2: Howser did give a speech last week too before the

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Speaker 2: National accounts came out, but in a sense that didn't

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Speaker 2: really sway what he said because again the content was terrific,

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Speaker 2: really interesting to hear his analysis, and I think the

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Speaker 2: thing that struck me about that presentation and that talk

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Speaker 2: that he gave was the what we call the counterfactual scenario.

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Speaker 2: So people were he was dressing the point that why

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Speaker 2: did you cut intero strates in the middle of February,

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Speaker 2: and he put this little chart showing that if they

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Speaker 2: did not cut rates trimmed mean inflation would be tracking

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Speaker 2: towards two and a quarter percent, so below the midpoint

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Speaker 2: of the target range. They did cut rates, and that

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Speaker 2: saw inflation not fall below the midpoint of the target range.

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Speaker 2: Then there are a couple other bits and bobs in

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Speaker 2: terms of the fore casts and projections there, but it

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Speaker 2: was basically saying that if the economy and their modeling

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Speaker 2: suggests that inflation's too low, they'll cut. If it's on

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Speaker 2: the target, they'll hold. And I suppose it's pretty obvious

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Speaker 2: when you say it, but if inflation's just even above

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Speaker 2: the midpoint of the target, so not above three percent,

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Speaker 2: but above the mid point of the target, they'll probably hold.

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Speaker 2: And only when it gets above three again will they hike.

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Speaker 1: It's interesting, right, I what have we got coming up

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Speaker 1: this week?

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Speaker 2: Well, domestically, there's only two bits, and it's about how

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Speaker 2: we are feeling, how happy are we. So there's the

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Speaker 2: consumer sentiment numbers from our friends at Westpac, and that's

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Speaker 2: a good survey and it did jump up a little

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Speaker 2: bit after the rate cut. Last time we've seen consumers

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Speaker 2: sort of responding to the fact that interest rates are

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Speaker 2: low us So whether any of the geopolitical things, the

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Speaker 2: goodness me, the horrendous cyclone are going to change people's

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Speaker 2: sentiment remains to be seen. But again interesting to see.

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Speaker 2: When consumers are happy, they tend to spend more. And

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Speaker 2: the NAB Business Confident Survey is out and again not

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Speaker 2: only do they assess ask businesses, are you confident? Are

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Speaker 2: you feeling optimistic about the economic outlook or not? They

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Speaker 2: ask a lot of sub questions about price pressures, profitability,

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Speaker 2: hiring intentions, so you get a really nice, up to

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Speaker 2: date snapshot on what the business sector was thinking. So

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Speaker 2: those two things are the really only powerful bits of

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Speaker 2: information that we get this week from the local economy.

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Speaker 2: And for the moment it's sort of all lies globally

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Speaker 2: and all eyes on sort of the cleanup from the cyclone.

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Speaker 1: Stephen, enjoy your week. Thank you as the Cinder Stephen

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Speaker 1: Cookole it's better known as the Cookie. You can find

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Speaker 1: him at the cook dot com and follow him on

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Speaker 1: X using the handle of the Kirk. I'm Seanler and

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Speaker 1: this is fear and greed, the weak Ahead