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Speaker 1: Welcome to Fear and Greek Q and A, where we

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Speaker 1: ask and to answer questions about business, investing, economics, politics

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Speaker 1: and more. I'm Sean Almer, and today it's all about

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Speaker 1: the economy in the state of the labor market in

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Speaker 1: Australia this Monday morning. We're joined by Cherrell Murphy, Chief

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Speaker 1: Economist Oceania at Ey Sharrell.

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Speaker 2: Good morning, Good wedding John.

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Speaker 1: Before we jump into the labor market, which is that

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Speaker 1: we've got labor force figures out this week. Pretty interesting

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Speaker 1: consumers sentiment reading last.

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Speaker 2: Week, yeah, it was. There was quite a big fall

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Speaker 2: in that measure from the Westpac Melbourne Institute Combined Consumer

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Speaker 2: Sentiment Index. It fell three point one percent, which doesn't

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Speaker 2: sound like a lot, but that's actually quite a big

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Speaker 2: move in a month for that indicator. It does suggest,

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Speaker 2: I think that consumers have become a little bit less

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Speaker 2: confident about further interest rate cuts from the IBA, though

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Speaker 2: there was you know, there was maybe some interesting information

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Speaker 2: also tremrentous that was a bit negative as well, so

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Speaker 2: it's not all about interest rates. And there was also

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Speaker 2: an indication in there that house press expectations had hit

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Speaker 2: a fifteen year high, so maybe that's also contributing to

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Speaker 2: that weak consumer sentiment, with some obviously feeling pretty locked

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Speaker 2: out of the housing market. So you know, certainly something

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Speaker 2: to keep an eye on. It can be a bit boundcy,

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Speaker 2: but you know, certainly not the kind of indicator that

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Speaker 2: we'd want to be seeing after three interest rate cuts

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Speaker 2: from the IRBA.

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Speaker 1: Imagined housing then sherelle, how important is housing not just

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Speaker 1: to the economy, but to the psyche of the economy,

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Speaker 1: be that business or consumers. It kind of to me

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Speaker 1: it's always been important, but it just seems to be

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Speaker 1: kind of as significant as ever.

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Speaker 2: Absolutely, It's just the stakes are so high, aren't they.

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Speaker 2: When you think about how much housing takes out of

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Speaker 2: the average holds budget, It's just so much. And mortgage

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Speaker 2: repayments can obviously make a big difference, even with the

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Speaker 2: twenty five basis point change in the variable interest rate

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Speaker 2: on your mortgage. But I do wonder because in the

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Speaker 2: past it's tended to show if you've got higher host

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Speaker 2: press you tend to get higher consumption. You know, that's

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Speaker 2: been fairly robust as a relationship. But I do wonder

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Speaker 2: know whether or not higher host prices are starting to

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Speaker 2: maybe be quite negative for some consumers, given they are

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Speaker 2: just feeling completely locked out of the market, and even

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Speaker 2: those with the host don't necessarily see it as one

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Speaker 2: hundred percent good thing when especially when they think about

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Speaker 2: their own kids, if they have them, and the fact

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Speaker 2: that they are really struggling with that. So yeah, I

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Speaker 2: think this relationship could definitely be changing.

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Speaker 1: Okay, let's move on to the week ahead. The big

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Speaker 1: ABS data out this week is labor force. What is

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Speaker 1: going on in the labor market now? We have a

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Speaker 1: four point two percent unemployment rate. I suppose I'm interested

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Speaker 1: in what you think will happen this week, but generally

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Speaker 1: how it's softening. I think everyone agrees that it's not

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Speaker 1: at a peak, it's coming off a bit. But how

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Speaker 1: concerned should we be about that?

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Speaker 2: Yeah? I don't think we should be too concerned at

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Speaker 2: the moment, because it has been so strong for such

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Speaker 2: a long period of time, and so any sort of

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Speaker 2: deterioration from here to some extent had to be expected

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Speaker 2: because you couldn't kind of maintain that level of job's

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Speaker 2: growth and such a low unemployment rate forever. Of course,

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Speaker 2: you know, it's hard to talk about this in the

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Speaker 2: macro because to one person Obviously, a loss of a

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Speaker 2: job is a big deal, so I don't kind of

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Speaker 2: want to take away from that, but I think, look,

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Speaker 2: we should see continued job's growth in September. And this

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Speaker 2: is a point actually that Michelle Bullock, the Governor of

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Speaker 2: Reserve Bank, made last week at the Senate Estenance Community

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Speaker 2: heing we're not actually seeing a lot of job losses.

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Speaker 2: What we're seeing is jobs growth not being as fast.

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Speaker 2: So for the most part, people are still finding work.

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Speaker 2: From here on in, it does seem like the labor

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Speaker 2: market will start to show the effects I guess of

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Speaker 2: you know, some of the previous leader, because the labor

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Speaker 2: market takes a long time to adjust, and as I say,

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Speaker 2: it's been so strong, so it probably will slow, but yeah,

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Speaker 2: not substantially. This week we might see the unemployment rate

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Speaker 2: jump from four point two to four point three percent.

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Speaker 2: Again not ideal, but not certainly not something I think

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Speaker 2: we have to worry too much about it.

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Speaker 1: I mean ten years ago, if you said we're worried

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Speaker 1: about unemployment rate going to four point three percent, people

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Speaker 1: would have thought you were mad, because for generations correct,

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Speaker 1: unemployment was five percent plus. So the actual market is

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Speaker 1: pretty strong. What else is coming up this week.

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Speaker 2: So we've also got the NAB Business Confidence and Business

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Speaker 2: Conditions with which is contained within the NAB Business Survey,

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Speaker 2: which is a really useful Indian care of what's happening

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Speaker 2: in the corporate sector. This look. This has been kind

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Speaker 2: of interesting because it's it's certainly not bad, but neither

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Speaker 2: is it good. Confidence and conditions both picked up a

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Speaker 2: tiny bit in the last couple of months, which, you know,

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Speaker 2: that's good news and probably to some extent reflective of

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Speaker 2: the slightly strong consumer and the slightly lower interest rates.

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Speaker 2: I think that's helping, But you know, neither are we

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Speaker 2: looking at a future where businesses are going, yes, let's go.

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Speaker 2: You know, let's get into it. Animal spirits are certainly

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Speaker 2: not firing. And I think a lot of that actually

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Speaker 2: comes down to some of the more structural issues in

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Speaker 2: the economy. That's sort of feeling that the sort of

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Speaker 2: productivity number is low, and the tax is too high,

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Speaker 2: and there's a lot of concern, I guess about what's

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Speaker 2: happening with the global economy. All of these seem to

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Speaker 2: be weighing a bit on business, and there's just a

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Speaker 2: bit of a feeling of you know, not not great,

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Speaker 2: you know, looking forward on that front, and.

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Speaker 1: Of course we're going to hear a lot from the

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Speaker 1: Reserve Bank this week, but it minutes from the most

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Speaker 1: recent board meeting as well as a few speakers.

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Speaker 2: Yeah, that's right. So this week we've got the RBN

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Speaker 2: minutes from the September Monetary Policy Board meeting. They'll come

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Speaker 2: out on Tuesday. Always worth a look. You get a

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Speaker 2: bit more detail about what exactly went on at that

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Speaker 2: board meeting. Of course there wasn't any change, but there's

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Speaker 2: always some I guess look forward doing that which is

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Speaker 2: worth getting a handle on. And yeah, thre speakeruse this week,

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Speaker 2: so quite a few. The Governor of Michelle Bullock, is

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Speaker 2: actually in Washington, so we get a very early conversation

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Speaker 2: at the Number of Research Forum actually from her on

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Speaker 2: Thursday morning, and then a little bit later in the

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Speaker 2: morning Chris Kent, who's the Assistant Governor of Financial Markets,

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Speaker 2: will talk to the CFA Society, and on early in

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Speaker 2: the week on Thursday, Sarah Hunter, who's the chief Economist,

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Speaker 2: she's speaking in Sydney, so there's gonna be quite a

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Speaker 2: lot to absorb there. Of course, it's now quite a

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Speaker 2: little while until we get to the next board meeting,

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Speaker 2: and so this is often when the Reserve Bank senior

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Speaker 2: leaders come out and start talking about some of the

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Speaker 2: issues they're thinking about. They want to leave a little

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Speaker 2: bit space between their public speeches and the board meeting,

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Speaker 2: so that's why it's pretty dense at the moment.

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Speaker 1: Enjoy the week, Charrelle.

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Speaker 2: Thanks Sean, you too.

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Speaker 1: It's Eryl Murphy, Chief Economist Oceania asked ey, I'm Suan

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Speaker 1: Alma and this is fear and greed Q and a