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

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

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Speaker 1: find him at the Cook dot com, t h G

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Speaker 1: E k O UK, the cook dot com and on

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

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Speaker 2: Good morning, Sean. How are you going this week?

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Speaker 1: Oh?

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Speaker 2: Great?

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Speaker 1: We had a fantastic week last week. Lots of economics

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Speaker 1: that talk about. But let's start with our favorite economist,

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Speaker 1: Reserve Bank Deputy Governor Andrew Hauser, who came out all

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Speaker 1: guns blazing, saying, you blakes are just taking it all

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Speaker 1: a bit too seriously, Stephen.

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Speaker 2: Don't tell us what to do. Was basically the code

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Speaker 2: or not so not so code written speech that he

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Speaker 2: gave the look. It was a fantastic speech, and he

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Speaker 2: was really saying that a lot of us economists talk

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Speaker 2: about the economic and the interest right outlook and make

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Speaker 2: our forecast with a high degree of certainty when we

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Speaker 2: know and the Reserve Bank know that there's a high

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Speaker 2: degree of uncertainty attached to those forecasts. He was just

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Speaker 2: sort of saying that it makes their job a little

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Speaker 2: bit harder when you get people thumping the table saying, oh,

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Speaker 2: the IBA's got a high call, they've got a cut,

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Speaker 2: when in fact the reality is somewhere in between, so

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Speaker 2: they're on hold. I think that's the sort of thing

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Speaker 2: that he was trying to get to.

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Speaker 1: And I know, but you know, not all of us

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Speaker 1: have the luxury of sitting there pontificating decide and will

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Speaker 1: we won't we. Some people have to make a call,

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Speaker 1: so investment decisions can be made, business decisions can be made. Yes,

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Speaker 1: I thought it was a little rich, to be honest,

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Speaker 1: I did too.

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Speaker 2: Look, I appreciated the speech, but I've been chatting to

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Speaker 2: a few economist mates of course about that speech. And

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Speaker 2: we're paid to have of you. Yeah, I can't imagine

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Speaker 2: us going to see a client, You're going to see

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Speaker 2: a big investment client, or a corporate or someone and saying, oh, look,

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Speaker 2: we're not really sure what's going to happen in the economy.

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Speaker 2: It might be okay, you know, we can't see too

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Speaker 2: many risks, or you have so many risks that you

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Speaker 2: end up saying nothing. We would be kicked out of

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Speaker 2: that room fast. And you can say recession. So you've

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Speaker 2: got to have of you. You've got a back. The

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Speaker 2: issue to me when I thought about what he was saying,

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Speaker 2: is that having views, it's the reasons why you have

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Speaker 2: that view. So why rates going up? Why rates going down?

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Speaker 2: And if you can analyze that, and then a sort

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Speaker 2: of not pick holes would sort of saying, look, I

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Speaker 2: can see why you're calling Ray hucks, but I don't

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Speaker 2: agree with you that the economy is still running hot,

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Speaker 2: for example, And that's the contestable point about all that

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Speaker 2: sort of stuff. But yeah, we're constantly got idea like

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Speaker 2: it's going to the Melbourne Cup and you've got the

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Speaker 2: you know, got old Greg Miles when he used to

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Speaker 2: call the Melbourne Cups. So the saying I'm not sure

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Speaker 2: who's going to win the race depends on who gets

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Speaker 2: luck and running and waiting till the sort of fifty

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Speaker 2: minutes from the winning pace, saying I think I can

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Speaker 2: give you the tip now, Yeah, thanks very much. You

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Speaker 2: need the tip, you need to forecast, you need to

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Speaker 2: take risks. And so there's the RBA. But I love him,

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Speaker 2: you know, the Hugh Grant in terms of his looks

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Speaker 2: and a really good fellow, really interesting fellow, and certainly

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Speaker 2: with a lot of color, which which is also good.

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Speaker 2: I think we're a central bankup.

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Speaker 1: Talking about color. Last week's data we had, I mean,

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Speaker 1: the unemployment figure was really interesting something for everyone. We

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Speaker 1: had interesting wages data, us data fill us in.

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Speaker 2: We'll start with our local labor market data. Because the

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Speaker 2: wages numbers were actually a little bit lower than expected.

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Speaker 2: There were some updivisions to the data a few quarters ago,

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Speaker 2: so the annual figure stayed at four point one percent

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Speaker 2: growth and the wage price index, but the quarterly reading

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Speaker 2: was only zero point eight percent, And in fact, the

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Speaker 2: last two quarters were zero point nine and zero point eight,

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Speaker 2: so that's one point seven I can do the maths

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Speaker 2: quite quickly. You annualize that, and you're about three and

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Speaker 2: a half percent of a fraction lower than that actually,

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Speaker 2: And that momentum in wages is starting to taper off,

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Speaker 2: so that any fears of a wage price spiral to

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Speaker 2: the extent that they had in the validity are probably

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Speaker 2: invalid right now that wages growth is moderating with the

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Speaker 2: moderating in the economy and the labor market numbers that

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Speaker 2: you alluded to. Sean, Well, we had the fifty eight

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Speaker 2: thousand increase in jobs I think it was, but the

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Speaker 2: unemployment rate went up from four point one to four

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Speaker 2: point two percent. So I think when we cut through

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Speaker 2: those numbers, we're getting a lot of jobs created because

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Speaker 2: the population growth so strong, but the economy is not

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Speaker 2: iming fast enough to absorb all of the increase in

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Speaker 2: the workforce participation into the ranks of employed ergo. Unemployment

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Speaker 2: has gone from three and a half percent about a

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Speaker 2: year ago to four point two percent in July.

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Speaker 1: So it's certainly on the rise the unmployed. I mean,

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Speaker 1: the lumber market is. It's not falling off a cliff

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Speaker 1: by any stretch, but it is softening somewhat.

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Speaker 2: It's softening someone and again to think that, yeah, I'm

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Speaker 2: I'm old fashioned.

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Speaker 1: In many ways you are, Stephen, you are going on.

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Speaker 2: Look, I'm a big fan of the leading indicators for

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Speaker 2: employment and the unemployed rate. Things like the good old

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Speaker 2: as job ads. They used to be newspaper as of

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Speaker 2: course they've had to move to Internet ads. Seek put

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Speaker 2: out a job vacancy series. The Bureau statistics to a

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Speaker 2: job vacancy series, and if you look at a chart

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Speaker 2: at the job vacancy, so demand the labor. In other words,

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Speaker 2: you don't put a mad on one of these sites

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Speaker 2: unless you need to have more people working for you. Well,

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Speaker 2: they're all falling down. They're all down about between twenty

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Speaker 2: five and thirty percent from their peak, you know, roughly

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Speaker 2: eighteen months ago. So that says to me that with

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Speaker 2: a lag is the other thing, we've got to be

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Speaker 2: very patient about lags. You're going to get the unemployment

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Speaker 2: rate continuing to sort of grind, not de zooming high,

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Speaker 2: but grinding higher over the course of the next well

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Speaker 2: six to nine to twelve months.

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Speaker 1: What about the data out of the US last week.

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Speaker 2: Yeah, Well we had the big one was the inflation upper,

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Speaker 2: the CPI number, and that came in broadly as expected.

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Speaker 2: We had the producer price in next too, which is

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Speaker 2: sort of one of the feeds into the goods inflation

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Speaker 2: side of US inflation. Both were either at or marginally

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Speaker 2: below expectations. The bond market rallied. The September meeting of

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Speaker 2: the US Federal Reserves got a twenty five basis point

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Speaker 2: rate cut priced in with a probability, like a genuine

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Speaker 2: fifty six percent probability that we're going to see a

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Speaker 2: fifty basis point rate cut when the Fed meats in

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Speaker 2: the middle of September. So the inflation rate, the inflation

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Speaker 2: momentums coming down in the US, rate cuts about to

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Speaker 2: be unfolded in the US, and you know, that's pretty

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Speaker 2: big implications, and we saw the stock market react to

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Speaker 2: that as well.

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Speaker 1: Not a lot going on this week, Stephen on the

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Speaker 1: economics front at all. I mean, it's suppose I've got

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Speaker 1: the Reserve Bank minutes, so that's somewhat superseded by the

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Speaker 1: fact we have a press conference after the Board many

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Speaker 1: a couple of weeks ago, so you can have a

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Speaker 1: bit of a quite a week.

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Speaker 2: Well, there's no top tier local domestic economic data from

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Speaker 2: the statistics in Yes, the Board minutes is still interesting

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Speaker 2: because it does elaborate some stuff that perhaps the governor

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Speaker 2: might not be asked at the press conference. And when

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Speaker 2: they've got this bias and clear concern about demand exceeding

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Speaker 2: supply and the economy, I think is Sarah one hundred,

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Speaker 2: the assistant governor said a week or two back. Now, yeah,

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Speaker 2: the economy in some areas is still running hot quote unquote.

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Speaker 2: I'd love to see which parts of the economy they

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Speaker 2: put the flesh on those comments to really identify where

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Speaker 2: the economy is running hot. Or where demand is too excessive.

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Speaker 2: So we'll look at the minutes as we always do,

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Speaker 2: but it might just be one where we can have

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Speaker 2: a relatively quiet time during the day, but the evenings

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Speaker 2: when the US and European markets are open will be

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Speaker 2: where the fund will be.

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Speaker 1: Having said that, in a few days, you're off, I've

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Speaker 1: seased for a couple of weeks holiday, aren't you.

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Speaker 2: Well well, indeed, well so I won't be looking. But

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Speaker 2: I'm heading onto the big silver bird very shortly in fact,

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Speaker 2: and heading off for a couple of weeks of holidays

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Speaker 2: so richly deserved in my opinion.

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Speaker 1: Absolutely, I'm with you, Tayley. Enjoy that. Stephen, thank you

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Speaker 1: for joining us this morning. Fantastic See in a couple

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Speaker 1: of weeks that was economist Stephen Coculus Bitter, known as

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Speaker 1: the Cook. You can find him at the cook dot

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Speaker 1: com and follow him on x using the handle of

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Speaker 1: the Cook. I'm sure all this is fear and greed.

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Speaker 2: The week ahead