Weekend news had US unemployment rising to 10.7%, but the better news is that the rate of job loss continues to fall.
The latest unemployment estimates released by Roy Morgan Research for the month of August suggest that unemployment in Australia may already have peaked — Roy Morgan has recorded a second straight month of declines in unemployment — now at 7.4% for August, down from 7.6% in June and 7.8% in July.
Coming on top of the globally significant 0.6% rise in GDP in the June quarter, this would have made Wayne Swan’s day as he met with G20 finance ministers in London. Pity about his jet-lagged gaffe when he mentioned the rise in the retirement age to 71, no doubt on the agenda for 2015.
Today, the Oliver index of job ads also signals better news to come for Australia’s labor markets, and David Uren has noticed the warning about inflation given by RBA chief Glenn Stevens.
The big debate now is about the “exit strategy” for fiscal policy. Now it looks as if the Reserve Bank of Australia will be the first central bank to begin to withdraw monetary stimulus, the logic of doing this before fiscal stimulus is withdrawn will be debated. The government’s view is that consumer stimulus has already peaked, while infrastructure spending stimulus will peak in the current quarter. So there is some sort of logic here, one assumes wholly by accident.
Meanwhile, debate about the foundations of macroeconomics is raging in the USA. The RBS’s Ken Henry will weigh into this debate tomorrow.
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