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

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Speaker 1: and as always I'm joined by economist Stephen Corculis. You'll

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Speaker 1: find herem at the Cook dot com, t h e

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Speaker 1: k o UK dot com and on X using the

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Speaker 1: handle the Kirk. Stephen, Good morning.

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Speaker 2: Been, good morning, Sean.

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Speaker 1: Well, let's talk about labor force figures from last week

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Speaker 1: had something for everyone, and we had kind of job losses,

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Speaker 1: but we still had an unemployment rate of four point

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Speaker 1: one percent. What's going on?

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Speaker 2: Oh, The monthly seasonally adjusted labor force numbers are incredibly volatile.

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Speaker 2: We've known that for many years now, and we saw

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Speaker 2: the classic case in the last two months where that

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Speaker 2: minus two and a half thousand for the month of

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Speaker 2: May followed a plus eighty eight thousand. So as the

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Speaker 2: Bureau of Statistics and our friends at the Reserve Bank

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Speaker 2: keep telling us, use the trend data, don't rely on

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Speaker 2: the one monthly number which is all over the place.

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Speaker 2: And that's showing that the rate of employment growth is

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Speaker 2: still solid, not strong. That there's been a trend slowing

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Speaker 2: in the rate of THEMP growth. And I think that's

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Speaker 2: part of the story that the Reserve back will take

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Speaker 2: out of these numbers, and as you touched on, an

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Speaker 2: unemployment rate of four point one percent is still remarkably

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Speaker 2: low that we've got basically the last year and a

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Speaker 2: half where the unemployment rate's been four four point one percent,

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Speaker 2: and despite the weakness in things like job ads and

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Speaker 2: job vacancies that we've seen for the past year, the

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Speaker 2: unemployment rates remaining low. And I think we know the

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Speaker 2: answer to that too, because people have worked out well

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Speaker 2: why is it? So it's because of a lot of

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Speaker 2: public sector and non market related employment that the government's

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Speaker 2: tried to hire people in age care facilities, healthcare, education

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Speaker 2: and the like. And even though the private sector's week

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Speaker 2: employments holding up and unemployments remaining relatively low.

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Speaker 1: Okay, So we come to this week and we've kind

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Speaker 1: of got two parts of the economy that we're really

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Speaker 1: focused on at the moment. The jobs mark, which we've

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Speaker 1: just been talking about, inflation, which have been obsessed with

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Speaker 1: now for a few years. We've got information on both

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Speaker 1: those data points this week. Yeah.

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Speaker 2: Inflation, it's the monthly inflation number and the good the

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Speaker 2: good news about this one, and we know that the

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Speaker 2: monthly number does not incorporate the same breadth of prices

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Speaker 2: that the quarterly number does, but being the May month

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Speaker 2: the middle month of each quarter, it does incorporate a

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Speaker 2: whole lot more than just the April and all the

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Speaker 2: germ numbers, So this one actually has a bit more

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Speaker 2: potency to it. And the market's currently looking for an

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Speaker 2: annual increase of about two point five percent, where it's

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Speaker 2: been for the past six months, So hooray the RBA

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Speaker 2: and the market will be pleased with that. But the

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Speaker 2: trimmed means the one that we're going to be looking

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Speaker 2: at as well, because that's the one that is more

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Speaker 2: important for the Reserve Bank and its monetary policy deliberations.

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Speaker 2: Probably a touch higher than the headline figure because there's

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Speaker 2: still some lagged effects of the electricity subsidies and these

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Speaker 2: sorts of things which pushed headline inflation lower. So we're

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Speaker 2: looking for about a two point seven percent on inflation,

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Speaker 2: confirming that, you know, the inflation problem is one of

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Speaker 2: last year, in the year before, and now we've got

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Speaker 2: inflation back under control. Now. The other big part of

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Speaker 2: the economic puzzle this week will be the job vacancy series,

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Speaker 2: and as we've just discussed on the labor market, numbers

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Speaker 2: really important part of the RBA deliberations and the economy

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Speaker 2: more broadly. Job vacancies have been trending down for the

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Speaker 2: last couple of years, largely driven by the weakness in

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Speaker 2: private sector demand for labor, as the private sector has

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Speaker 2: been weak under the weight I suppose of previous interest

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Speaker 2: rate tightening cycles. So we're looking for hopefully a relatively

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Speaker 2: resilient job vacancy's number. The risk is that we get

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Speaker 2: a minus two or three percent for the quarter, because

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Speaker 2: they're quarterly numbers, of these job vacancy numbers, and that

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Speaker 2: will probably signal again that the labor markets not quite

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Speaker 2: as tight as the Reserve Bank would have us believe.

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Speaker 2: And it keeps the door wide open for eighth of July.

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Speaker 2: And it's a straight cut which is currently pretty much,

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Speaker 2: as I look at by screens, pretty much priced in

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Speaker 2: for a twenty five point move.

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Speaker 1: Okay, so the economic mixed master comes into all this.

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Speaker 1: Seven you put all that together, we are going to

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Speaker 1: get rate cuts later in the year, be the next

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Speaker 1: month or the month after.

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Speaker 2: That's a bit of the debate right now that yes,

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Speaker 2: and gosh, we can't ignore what's happening globally and we

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Speaker 2: won't even talk about that because it's such a moving

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Speaker 2: feast and such an absolute well changing area, both geopolitics

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Speaker 2: and Trump tariffs, which has sort of got a little

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Speaker 2: bit by the wayside, and the US budget deficit which

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Speaker 2: again is a massive issue impacting bond markets and the like.

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Speaker 2: So all these things that the RBA will put into

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Speaker 2: the mix, and yet the futures market's still pricing in

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Speaker 2: rate cuts, but just the timing is always uncertain.

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Speaker 1: Stephen, enjoy the week.

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Speaker 2: Thank you.

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Speaker 1: That was economist Stephen Coucoulis bit a nan as the Kirk.

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Speaker 1: You can find him at the Cook dot com, t

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Speaker 1: a g k o uk dot com and follow him

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Speaker 1: on X using the handle the Kirk. I'm Seane on

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Speaker 1: and this is here in Greed The week Ahead