Michael Blythe
Michael Blythe
antidote australian best caution consumer domestic economic good labor major market outcomes outlook risk shaping
Consumer caution was shaping up as the major domestic risk to the Australian economic outlook in 2006. Good labor market outcomes were always going to be the best antidote to this caution.
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Consumer caution persists and a weak housing sector remains a drag on overall services sector activity.
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There were new building regulations there that took effect from July 1 which are going to bump up the cost of new houses. It looks like there was a last minute rush to beat that which pumped up previous months and created this pothole for us to fall into in July,
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A difficult retail environment resulted in significant discounting, so lower prices for clothing, household appliances, tools and computing equipment are possible. A low CPI number obviously increases the odds on the Reserve Bank continuing to sit on the sidelines.
interest likely outcome rates
The most likely outcome is that interest rates will rise.
extra shove suspect toward
So we suspect that it won't take much to give the RBA that extra shove toward tightening.