More jobs created, but also more people underemployed
Despite nearly 35,000 new jobs being created in August, the unemployment rate crept upwards to 5.3 per cent. The number of people underemployed - people not working in paid employment at full capacity - also increased 0.1 per cent to 8.6 per cent.
As a result, when the Reserve Bank meets again on October 1, ANZ, Westpac and CommBank are all anticipating the official cash rate will be cut to 0.75 per cent. Futures markets give it a 70 per cent chance that we'll be looking at a new record low.
The RBA has been arguing for some time for more government policy-led economic stimulus. RBA governor Philip Lowe will be speaking at an event in Armidale, NSW next week; we'll be watching to see if he drops any hints on what's likely to occur.
Naturally, Treasurer Josh Frydenberg was talking up the number of new jobs in Parliament yesterday, saying more than 1000 jobs a day have been created since the government was returned in May. This, along with the new-found surplus that has got the national budget onto a stronger track, has backed up the government's decision not to entertain any new stimulus measures.
But as the Herald's Shane Wright explains today, the budget and the economy are two very different things. There may be more money in the country's coffers but the story of the nation's hip pockets are very different - which is the problem Dr Lowe's team is charged with solving. At this stage, that's like trying to bring down an elephant with a pea-shooter.
Little wonder consumer sentiment remains weak despite recent tax breaks. Opinions differ on what August's retail figures are likely to look like; while CBA reckons we'll see a 0.9 per cent in takings at the cash register, NAB thinks it'll be a much lower 0.3 per cent increase. Neither are enough to get hearts racing among those charged with improving Australia's economic conditions.
National School Strike for Climate on today
Speaking of Rome burning, school students across the country are going on strike, to raise awareness of climate change.
The strike has been inspired by Swedish teenager Greta Thunberg, whose calls for action on climate change have become a lightning rod for a generation. Striking students are expected to be joined by staff of more than 2000 employers across the country, who are giving their people leave to join the protests.
New lending crackdown
As lenders continue to struggle to get to grips with increased due diligence requirements in the wake of the royal commission, we've heard today that applicants with recent cash withdrawals or account transfers above $1000 will face increased scrutiny.
Lenders are working hard to uncover "hidden debt" and future liabilities as they probe further and further into the finances of potential borrowers. It's yet another piece of evidence that while interest rates may be low and competition among lenders high, the biggest hurdle - that of actually having a loan application accepted - remains in place.
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