Invest
The outlook for wages in 2019, and what likely tax cuts mean for interest rates
Invest
The outlook for wages in 2019, and what likely tax cuts mean for interest rates
The pace of wages growth is increasing slowly in Australia, against a backdrop of weak quarterly inflation data.
The outlook for wages in 2019, and what likely tax cuts mean for interest rates
The pace of wages growth is increasing slowly in Australia, against a backdrop of weak quarterly inflation data.
Last week’s consumer price inflation data reported zero price growth in the March 2019 quarter, with the annual inflation rate falling to a low 1.3 per cent. This was 0.7 per cent lower than the minimum 2 per cent growth that the RBA aims for yearly.
This aligns with the comments of Deloitte Access Economics’ Chris Richardson prior to the federal budget’s release, which is that a budget surplus is not necessarily a sign of a thriving economy.
“The economy is getting better, but the budget is getting worse,” he said.
There were some wins in the figures for consumers, though, as the price of oil, electricity and the building costs of new homes all fell.
However, the drought in Australia is continuing to drive up vegetable prices, compounded by education and health prices also increasing in the March quarter.
The overall unemployment rate remains low at 5 per cent, and employment growth remains well above growth in the working-age population.
Further, while weak inflation data has shifted market expectations towards a rate cut on Tuesday, 7 May, the prospect of lower tax rates later in the year might sway the RBA’s decision towards waiting.
Both sides of government have announced a spate of tax sweeteners in the lead up to the federal election. You can read more about Labor’s plans here and Liberal’s plans here.
The official cash rate has been on hold for about two and a half years, and during that time, out-of-cycle rate hikes and drops have become a market expectation. You can read more about that here.
RELATED ARTICLES
About the author
About the author
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
