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

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

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Speaker 1: find him at the Cook dot com, t g kouk

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Speaker 1: dot com and on x using to handle the kirk

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Speaker 1: the kirk, I e. Stephen, Good morning, Good, good morning, Sean.

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Speaker 1: Busy week last week, plenty of data out, retail sales, building,

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Speaker 1: we had trade balances, we had RBA minutes. What do

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Speaker 1: we know at where we stand now compared to where

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Speaker 1: we were this time last week?

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Speaker 2: It was just a tiny smidg I don't want to

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Speaker 2: get too excited, a tiny smidge of slightly better news

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Speaker 2: because the retail sales numbers came in at plus point six,

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Speaker 2: which was above expectations, and even though the Bureau of

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Speaker 2: Statistics explain them away in a sense by saying there

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Speaker 2: appears to be a change in consumer spending patterns anticipating

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Speaker 2: the midyear sale, so that that might have explained the increase,

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Speaker 2: so there's probably going to be a dip next month.

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Speaker 2: Were still okay. Numbers building approvals plus five and a

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Speaker 2: half percent from an incredibly low base, but at least

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Speaker 2: it's a plus sign The trade balance was down a

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Speaker 2: little bit, but not troublingly. So it's just a little

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Speaker 2: bit under six billion dollars for the month. So the

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Speaker 2: numbers that came out last week were okay, yeah, they weren't.

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Speaker 2: They weren't consistent with the economy cascading towards a hard

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Speaker 2: landing or recession and that so we'll take we'll take

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Speaker 2: them there. We get it up with a plus side

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Speaker 2: in front of it's always better than minus, right.

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Speaker 1: What about the RBA minutes?

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Speaker 2: Soh the minutes, Well, they spoke about as the Governor, MICHELLF.

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Speaker 2: Bull Look said when she gave her press conference immediately

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Speaker 2: after that board meeting, the consideration was either the keep

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Speaker 2: rates steady, which they did, or they gave consideration to

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Speaker 2: a rad hike. Now they didn't pull the trigger on that,

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Speaker 2: as we've discussed in recent weeks, because they're still seeing

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Speaker 2: an uncertain picture for the health of the economy. Or

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Speaker 2: the GINP numbers came out just before that Board meeting.

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Speaker 2: They showed that really disappointing point one percent GDP growth.

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Speaker 2: And while they're still a little frustrated about how quickly

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Speaker 2: that inflation rates falling back towards the target they thought, well, look,

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Speaker 2: let's just wait till the next meeting, which happens in

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Speaker 2: early August. So that's why the markets are still very

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Speaker 2: excited about the prospect of a rate hike, not a

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Speaker 2: cup But as again, the next couple of weeks will

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Speaker 2: be really interesting for data because in following weeks we

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Speaker 2: get the labor market numbers and of course thirty first

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Speaker 2: of July the inflation numbers.

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Speaker 1: So in a way it is really all about those

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Speaker 1: inflation numbers. I know this week we have lending finance

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Speaker 1: data aut but there's not a lot coming up this

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Speaker 1: week particularly, but even the stuff afterwards, you know, kind

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Speaker 1: of July thirty one, it seems to be d Day,

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Speaker 1: that is it.

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Speaker 2: Yeah, this week we've only got the lending finance numbers.

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Speaker 2: They'll be sort of ticking up a little bit. People

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Speaker 2: are borrowing money because house prices is still going up,

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Speaker 2: particularly in Perth, Brisbane and Adelaide and a bit in

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Speaker 2: Sydney too, so they're just going to go through to

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Speaker 2: the keeper. I reckon when we get those numbers later today,

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Speaker 2: it is all eyes on that inflation number at the

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Speaker 2: end of the month, although we have the employment numbers

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Speaker 2: next week They're going to be interesting too, given the

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Speaker 2: dual mandate of the RBA and what Deputy Governor Andrew

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Speaker 2: House was talking about about ten days ago when he

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Speaker 2: said that we have a duel man that inflation of course,

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Speaker 2: of course, but we also need to keep the economy

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Speaker 2: running at full employment. So the span in the works,

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Speaker 2: I suppose would be if we got a particularly weak

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Speaker 2: employment numbers, say, and I haven't done the forecast yet,

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Speaker 2: this will be for next week's week ahead. If we

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Speaker 2: get a sort of a flat employment number, the unemployment

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Speaker 2: rate ticks up to four point one or four point

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Speaker 2: two percent, will that counter any upside risk to the

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Speaker 2: inflation numbers that come out at the end of July.

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Speaker 2: So there's still many moving parts on this machine on

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Speaker 2: the economy and will they won't they hike interstrates on

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Speaker 2: will they cut them? Even so there's all these moving

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Speaker 2: parts and they change every every week. Basically I don't

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Speaker 2: get well.

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Speaker 1: I get confused by the Reserve Bank, to be perfectly honest,

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Speaker 1: because they have got this dual mandate on inflation and employment.

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Speaker 1: And I know what the Deputy Governor said, but it

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Speaker 1: seems to me that you know, the more equal of

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Speaker 1: two equals is definitely inflation.

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Speaker 2: I think that's a fair assessment too. Look, I think

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Speaker 2: that assessment's correct because it's a very easy to understand,

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Speaker 2: and there's a numerical target between two and three percent inflation,

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Speaker 2: so it's pretty clear. So if inflation is are four

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Speaker 2: or one or three, you know, you know whether you're

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Speaker 2: up barb it or blood or in the sweet spot

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Speaker 2: of hitting your inflation target. So that's in a sense

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Speaker 2: easy to sort of work out. Full employment, what on

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Speaker 2: earth is all employment? And this debate and oh nayru

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Speaker 2: and what's happening to wages growth? There are so many

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Speaker 2: different things, and of course it changes over time too.

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Speaker 2: What was full employment a decade ago is probably very

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Speaker 2: is very different to what full employment is today because

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Speaker 2: of technological change, productivity nuances both up and down as

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Speaker 2: we're seeing in recent years. So measuring full employment is

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Speaker 2: mighty mighty difficult. We only know about five years after

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Speaker 2: the event whether we have full employment, so it doesn't

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Speaker 2: mean that they don't have it in the forefront of

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Speaker 2: their mind when they're adjusting policy. But at the moment

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Speaker 2: when unemployment's going up and wages growth is topping out,

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Speaker 2: it gets a bit more attention than if it was

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Speaker 2: clearly stuck at a very very low level and wages

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Speaker 2: were still accelerating. So that's what's making that discussion on

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Speaker 2: what's full employment a little bit more interesting.

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Speaker 1: Do you like these weeks that we've got coming up to, Stephen,

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Speaker 1: which are just a little bit slower than normal.

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Speaker 2: I do a chance to catch up on stuff, and

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Speaker 2: of course we've got the incredible world of politics going

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Speaker 2: on last week at the UK election, you know, the

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Speaker 2: US presidential election is getting closed from It's an absolute

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Speaker 2: mind field France, you know. Oh yeah, and I do

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Speaker 2: love politics too, but I just don't know what to

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Speaker 2: make of all that stuff. So it might be looking

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Speaker 2: more listening to podcasts about the political side of the

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Speaker 2: world rather than pure economics because there's not a lot

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Speaker 2: of local news.

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Speaker 1: Unfortunately, nothing wrong with listening to podcast Stephen, thank you

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Speaker 1: for talking to Fear and Greed.

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Speaker 2: Thank you, Sean.

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Speaker 1: That was economist Stephen Cocoleos, better known as the Cook.

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Speaker 1: You can fine to him at the cook dot com

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Speaker 1: and follow him on x using the handle the Cook.

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Speaker 1: I'm Sean I Almer and this is Fear and Greed.

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Speaker 1: The week Ahead