Vital Statistics
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GDP
(average growth for year to Sep 09)
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-2.2%
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CPI
(Sep 09 incr on Sep 08) |
1.7%
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Current account balance
(year to Sep 09, % of GDP) |
-3.1%
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Unemployment
(Sep 09) |
6.5%
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Employment
(Sep 09 change on Sep 08) |
-1.8%
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World Economy
International Cash Rates
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08 Oct 2009
The announcement by the Reserve Bank of Australia that it is raising interest rates by 25 basis points is stupefying. This is a strong statement from an author who generally has a lot of respect for the monetary policy system in Australia, which doesn’t use inflation as its sole target.
The objectives of the RBA in terms of legislation are to ensure exchange rate stability, maintain full »»
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20 Jul 2009
Try as you might, it’s hard to find positive news out of the United States. We could try and put a positive spin on the numbers: the number of jobless increased in May, but by half the average number in the previous six months. Overall productivity is up, if we ignore the durable goods manufacturing sector, which is imploding by any measure used. And of course, inflation is at zero. In »»
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20 Jul 2009
The growth forecasts of our major trading partners indicate the outlook for exports from New Zealand is looking less than great over the next 12 months. However, there may be a more positive outlook towards the end of 2010.
Growth in Australia (our main trading partner taking nearly a quarter of our merchandise exports) has eased back into positive territory, excellent news for us. At the same »»
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20 Jul 2009
After a brief foray into the red, Australia’s GDP is up on the same quarter a year ago (by a measly 0.4 percent). This was thanks to a strong March quarter in which GDP grew by the same percentage. The main factors driving the resurgence were reduced imports and stronger exports, as the A$ plummeted (from 85c to 65c against the greenback in three months) along with oil prices. These factors »»
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26 May 2009
Part of the recent optimism in world markets rests on the belief that China’s fiscal-stimulus package is boosting its economy and that GDP growth could come close to the government’s target of 8% this year. Some economists, however, suspect that the figures overstate the economy’s true growth rate and that Beijing would report 8% regardless of the truth. Is China cheating?
Economists have long doubted the credibility of »»
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30 Apr 2009
There are now 332 less billionaires in the world and, on average, each billionaire has lost almost a quarter of their (financial) wealth over the past few months. Of the 793 billionaires remaining, 55 live in New York, 28 in London, and 27 in Moscow. The heart bleeds.
The latest prediction from the World Bank is that the world economy will shrink for the first time since WWII.
Australia, our »»
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30 Apr 2009
The news out of the United States continues to be bad on all fronts. Unemployment sits at 8.1 percent (2.6m job losses in the last four months, and 851,000 in February alone). Even the usual productivity gains are absent, down 0.4 percent in the fourth quarter. And for the first time (yes, the first time) in the current downturn, the United States is in a technical recession, having suffered »»
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30 Apr 2009
Australian GDP is shrinking despite continuing strong business investment. Exports are still surprisingly resilient, but consumption spending has flattened. Signs of the sharp slowdown include the $3.2bn decline in imports for the quarter, house price growth turning negative after another burst of growth in the last year, and a downward turn in labour force participation. Unemployment is »»
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16 Jul 2008
Freddie Mac and Fanny Mae might be catchy nicknames for lending organizations, but the hole they have dug for themselves is sufficiently deep for it to affect the Federal Reserve’s decision on whether or not to raise the federal funds rate in early August.
By definition, the business that Freddie Mac (more formally, the Federal Home Loan Mortgage Corporation) and Fanny Mae (the Federal National Mortgage Association) does is more open to »»
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01 May 2008
The US Federal Reserve has once again cut the federal funds rate, to just 2.0%. Despite soaring energy and food prices, the Board acted to stimulate the economy by making credit more accessible. The Fed believes there will be a flattening out in energy prices in particular in the coming months, reducing the impact of that component on overall inflation.
And despite all the scare-mongering about how the US is in recession, March GDP »»
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19 Mar 2008
The Fed cut rates again on Tuesday, this time by 75 basis points, bringing the rate to just 2.25 percent, the lowest since 2004. This was coupled with other extraordinary action, such as a 25 basis point cut in the discount rate, and the extension of a US$30 billion line of credit to cover investments by Bear Stearns. The calamity to befall Bear Stearns, the fifth-largest investment bank in the US, is beginning to reveal just how »»
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