1 00:00:05,120 --> 00:00:07,560 Speaker 1: Welcome to Fear and Greed the Week Ahead. I'm Sean Almer, 2 00:00:07,640 --> 00:00:10,840 Speaker 1: and as always I'm joined by economist Stephen Kukulas for 3 00:00:10,880 --> 00:00:13,240 Speaker 1: the last time this year. You'll find Stephen at the 4 00:00:13,280 --> 00:00:15,720 Speaker 1: Cook dot com, t h e k o uk dot 5 00:00:15,720 --> 00:00:18,960 Speaker 1: com and on X using the handle the kirk Stephen. 6 00:00:19,000 --> 00:00:23,599 Speaker 1: Good morning, Good morning, Sean. What a cracking way to 7 00:00:23,680 --> 00:00:26,400 Speaker 1: finish a year of economics with that labor force figure 8 00:00:26,440 --> 00:00:26,960 Speaker 1: last week. 9 00:00:27,280 --> 00:00:30,160 Speaker 2: Well, when we saw that on Thursday, I think it 10 00:00:30,240 --> 00:00:34,000 Speaker 2: was shockingly fantastic. Yeah. One of the things that US 11 00:00:34,000 --> 00:00:37,240 Speaker 2: economists love and one of the reasons we worried about 12 00:00:37,280 --> 00:00:40,600 Speaker 2: tax reform that we worry about, you know, education and 13 00:00:40,680 --> 00:00:44,640 Speaker 2: infrastructure and all those other things productivity is to get 14 00:00:45,040 --> 00:00:47,680 Speaker 2: the unemployment rate as low as possible, and of course 15 00:00:47,680 --> 00:00:50,160 Speaker 2: that's one of the aims of the RBA. So when 16 00:00:50,159 --> 00:00:52,640 Speaker 2: we saw that three point ninth the said unemployment rate 17 00:00:52,720 --> 00:00:57,920 Speaker 2: hit the screens last Thursday, there was an audible oh 18 00:00:58,040 --> 00:01:01,320 Speaker 2: coming from around Australia, I think from the economists because 19 00:01:01,400 --> 00:01:05,120 Speaker 2: no one, no one in their right mind saw that coming, 20 00:01:05,680 --> 00:01:07,520 Speaker 2: particularly on the back of the week it growth, and 21 00:01:08,000 --> 00:01:10,600 Speaker 2: it really started a debate that this debate will probably 22 00:01:10,640 --> 00:01:13,200 Speaker 2: take some time to resolve, like months and if not 23 00:01:13,440 --> 00:01:17,400 Speaker 2: a year. Have we got the situation in Australia where 24 00:01:17,440 --> 00:01:21,240 Speaker 2: that NAHRU the full employment unemployment rates is sort of 25 00:01:21,280 --> 00:01:25,360 Speaker 2: like three and a half to four percent. Professor Garno 26 00:01:25,360 --> 00:01:27,920 Speaker 2: thinks that. So there's one very smart person who thinks that, 27 00:01:28,240 --> 00:01:29,640 Speaker 2: or is it the four and a half of the 28 00:01:29,760 --> 00:01:32,360 Speaker 2: RBA and most of us were sort of thinking before 29 00:01:32,520 --> 00:01:35,880 Speaker 2: last week and if it is lower, it does have 30 00:01:35,959 --> 00:01:38,440 Speaker 2: implications still for interest rates. Even though the knee jerk 31 00:01:38,480 --> 00:01:41,400 Speaker 2: reaction to wow, that's an incredibly low employment rate was 32 00:01:41,440 --> 00:01:44,280 Speaker 2: to push back the timing of the rate cut. It 33 00:01:44,720 --> 00:01:47,880 Speaker 2: was a game changing number. It was extraordinary. Now we 34 00:01:47,960 --> 00:01:49,480 Speaker 2: want to see another one or two months of it, 35 00:01:49,640 --> 00:01:50,800 Speaker 2: but it was extraordinary. 36 00:01:51,680 --> 00:01:54,680 Speaker 1: We kind of end the year. It hasn't been a 37 00:01:54,680 --> 00:01:58,080 Speaker 1: bad year. I know economic growth is slow, but inflation 38 00:01:58,200 --> 00:02:01,240 Speaker 1: is ticking. Lower interest rates the new normal is certainly 39 00:02:01,280 --> 00:02:03,960 Speaker 1: higher interest rates than they were five years ago. You know, 40 00:02:03,960 --> 00:02:07,160 Speaker 1: we've got this incredible employment market. We're not too badly. 41 00:02:06,840 --> 00:02:08,880 Speaker 2: Off really, and I think that's the point that the 42 00:02:08,960 --> 00:02:13,000 Speaker 2: RBA made last week with the onhold decision, which again 43 00:02:13,160 --> 00:02:15,480 Speaker 2: I think everybody thought, and we had the government give 44 00:02:15,520 --> 00:02:18,160 Speaker 2: her press conference and then the Deputy Governor Andrew Howes 45 00:02:18,160 --> 00:02:20,280 Speaker 2: are giving a speech on I think it was Wednesday 46 00:02:20,360 --> 00:02:23,000 Speaker 2: night last week, and they were sort of saying a 47 00:02:23,040 --> 00:02:25,880 Speaker 2: similar sort of thing. Look, we're worried via economists of 48 00:02:25,919 --> 00:02:28,080 Speaker 2: paid to be worried about the next sort of bad 49 00:02:28,120 --> 00:02:30,200 Speaker 2: bit of news to come along. But as we reflect 50 00:02:30,240 --> 00:02:32,200 Speaker 2: on what happened in twenty twenty four, and you said 51 00:02:32,240 --> 00:02:34,799 Speaker 2: the unemployment rate, that's called it hovering at four percent 52 00:02:34,880 --> 00:02:37,799 Speaker 2: basically for the whole year, job creation is still being 53 00:02:37,840 --> 00:02:41,520 Speaker 2: pretty good, Inflation ticking down, wages while they've come off 54 00:02:41,600 --> 00:02:44,200 Speaker 2: the highs are still higher than inflation, so that's a 55 00:02:44,200 --> 00:02:46,960 Speaker 2: good thing. And then things like you know, the ASX 56 00:02:47,320 --> 00:02:50,000 Speaker 2: bumping at record hives all through the latter part of 57 00:02:50,040 --> 00:02:51,840 Speaker 2: the year too, like that's a good thing. And the 58 00:02:51,880 --> 00:02:55,120 Speaker 2: housing market well something for everybody because prices are starting 59 00:02:55,160 --> 00:02:58,560 Speaker 2: to ease just a smidge too, so that affordability is 60 00:02:58,560 --> 00:03:00,120 Speaker 2: not a stretch, but people have got a how to 61 00:03:00,160 --> 00:03:02,880 Speaker 2: still as riches can be. And so you sort of 62 00:03:03,240 --> 00:03:05,840 Speaker 2: take stock for a minute, we're doing okay. 63 00:03:06,600 --> 00:03:09,000 Speaker 1: I wonder whether that'll come out in the election next year, 64 00:03:09,040 --> 00:03:11,240 Speaker 1: the people that we are actually doing okay. 65 00:03:11,560 --> 00:03:16,560 Speaker 2: Well, I'm talking to macro thing is yes, because within that, yeah, 66 00:03:16,560 --> 00:03:19,960 Speaker 2: within that overarching economic growth, full employment, all these other things. 67 00:03:20,040 --> 00:03:22,200 Speaker 2: And there's a few other theories going around about why 68 00:03:22,240 --> 00:03:25,359 Speaker 2: the labor market's been so strong, which is a structural change. 69 00:03:25,400 --> 00:03:27,400 Speaker 2: So just if I can spend twenty seconds on it, 70 00:03:28,160 --> 00:03:29,679 Speaker 2: if you're being told to do a few hours, or 71 00:03:29,720 --> 00:03:32,240 Speaker 2: you've been sacked from your job in retail or hospitality, 72 00:03:32,880 --> 00:03:36,040 Speaker 2: unlike the old days, when you're unemployed, nowadays you just 73 00:03:36,080 --> 00:03:38,400 Speaker 2: go to Uber, you open up an Uber driver account, 74 00:03:38,440 --> 00:03:40,080 Speaker 2: and you become an Uber driver to at least get 75 00:03:40,080 --> 00:03:42,520 Speaker 2: a bit of cash flow to keep your household on 76 00:03:42,560 --> 00:03:45,640 Speaker 2: the book. So your countd is employed even though you 77 00:03:45,720 --> 00:03:49,640 Speaker 2: were made unemployed by your previous employee. So that structural change, 78 00:03:49,680 --> 00:03:52,800 Speaker 2: those sorts of change, is how easy it is to 79 00:03:52,800 --> 00:03:56,400 Speaker 2: set up a new occupation for yourself if you're desperate 80 00:03:56,440 --> 00:03:58,400 Speaker 2: for money and you've got mortgages and rents and kids 81 00:03:58,400 --> 00:04:00,680 Speaker 2: and all these other things to do. It's made those 82 00:04:00,800 --> 00:04:02,800 Speaker 2: numbers argue with a bit harder to read. 83 00:04:04,040 --> 00:04:06,200 Speaker 1: Stephen, Actually, not much going on this week, which is 84 00:04:06,200 --> 00:04:08,200 Speaker 1: fair enough because we're almost at Christmas. I think it's 85 00:04:08,200 --> 00:04:10,040 Speaker 1: time for all you economists to have a break. But 86 00:04:10,080 --> 00:04:11,800 Speaker 1: There isn't much on this week? Is there? 87 00:04:11,920 --> 00:04:13,680 Speaker 2: Not much? The only thing that I think popping up 88 00:04:13,720 --> 00:04:17,720 Speaker 2: is the my EFO. Oh, of course, Jim Charmers will 89 00:04:17,720 --> 00:04:20,000 Speaker 2: be releasing the budget update, and you sort of alluded 90 00:04:20,000 --> 00:04:21,599 Speaker 2: to bits and pieces of this, and you know, all 91 00:04:21,640 --> 00:04:23,480 Speaker 2: the smart people who sort of dig through the budget 92 00:04:23,560 --> 00:04:25,880 Speaker 2: numbers are sort of saying that the budget deficit that 93 00:04:25,920 --> 00:04:29,599 Speaker 2: they forecast in May, so six seven months ago now 94 00:04:29,839 --> 00:04:32,880 Speaker 2: will not be that much different. They're punting for a 95 00:04:32,880 --> 00:04:35,120 Speaker 2: deficit of about twenty eight billion when the budget was 96 00:04:35,560 --> 00:04:38,240 Speaker 2: handed down back in May. Look, there's been something's a 97 00:04:38,279 --> 00:04:39,960 Speaker 2: bit weaker, something's a bit stronger. And I think, as 98 00:04:39,960 --> 00:04:42,880 Speaker 2: we allud it to the beginning, it's not that different 99 00:04:42,920 --> 00:04:46,080 Speaker 2: to what Treasury was thinking. So the budget deficit number, 100 00:04:46,080 --> 00:04:49,080 Speaker 2: which of course everyone will look at, will be there 101 00:04:49,160 --> 00:04:51,359 Speaker 2: or thereabouts. It won't be a massive difference from the 102 00:04:51,400 --> 00:04:54,359 Speaker 2: twenty eight billion that Charmers was forecasting. And do you 103 00:04:54,360 --> 00:04:56,720 Speaker 2: know what, I think most people will glance at it 104 00:04:56,839 --> 00:04:59,279 Speaker 2: and then go off to their Christmas parties or down 105 00:04:59,320 --> 00:05:01,320 Speaker 2: to the beach. We'll watch the cricket. 106 00:05:01,680 --> 00:05:04,640 Speaker 1: Now. You do know, Stephen, that during the summer, in 107 00:05:04,640 --> 00:05:07,200 Speaker 1: that first week of January, we're going to interrupt your 108 00:05:07,200 --> 00:05:09,039 Speaker 1: holiday and we're going to get you to come on 109 00:05:09,080 --> 00:05:11,600 Speaker 1: the show and talk about the economy. We won't until then. 110 00:05:11,680 --> 00:05:13,799 Speaker 1: We're going to give you a good ten day break 111 00:05:13,880 --> 00:05:16,160 Speaker 1: or whatever, maybe two week break you but we want 112 00:05:16,279 --> 00:05:16,640 Speaker 1: you back. 113 00:05:17,279 --> 00:05:18,800 Speaker 2: I'll be back and look and we'll have a bit 114 00:05:18,839 --> 00:05:19,880 Speaker 2: of a I guess we're going to have a bit 115 00:05:19,880 --> 00:05:21,520 Speaker 2: of a sort of look at the year ahead in 116 00:05:21,920 --> 00:05:24,240 Speaker 2: January when we get together again and sort of well 117 00:05:24,240 --> 00:05:26,160 Speaker 2: where are we like, I'll have a chance to over 118 00:05:26,279 --> 00:05:29,080 Speaker 2: Christmas time to you know, put my feed up, as 119 00:05:29,080 --> 00:05:31,120 Speaker 2: I said, watch the cricket, have a nice meal with 120 00:05:31,200 --> 00:05:33,960 Speaker 2: my lovely family, and reflect on where this is the 121 00:05:34,040 --> 00:05:36,600 Speaker 2: economy in twenty twenty five, and we'll chat about it then. 122 00:05:37,160 --> 00:05:40,279 Speaker 1: Fantastic, thank you very much for everything this year seven 123 00:05:40,360 --> 00:05:41,720 Speaker 1: and enjoy your break and. 124 00:05:41,800 --> 00:05:44,440 Speaker 2: Enjoy your break too, and to everybody out there, fantastic love, 125 00:05:44,520 --> 00:05:46,320 Speaker 2: love You's all. Thanks. 126 00:05:46,880 --> 00:05:48,640 Speaker 1: That was the kind of a Stephen could cool Us 127 00:05:48,880 --> 00:05:51,160 Speaker 1: better known as Love is All the Kook. You can 128 00:05:51,160 --> 00:05:53,040 Speaker 1: find him at the cook dot com and follow him 129 00:05:53,040 --> 00:05:55,400 Speaker 1: on x using the handle the kirk. I'su on ail 130 00:05:55,440 --> 00:05:56,560 Speaker 1: man and this is Fear and Greed. 131 00:05:56,600 --> 00:05:57,159 Speaker 2: The Week Ahead