Inflation

[gartley]

Sharp drop in November. I had a look at the figures and insurance looks like the worst offender. The sharp rises though will have a deflationary effect over the medium term.

Looks good though. Feeling confident that it won't be long before inflation is back below 3% provided the government doesn't blink, the Treasurer sounds resolute.

Sharp drop in November. I had a look at the figures and insurance looks like the worst offender. The sharp rises though will have a deflationary effect over the medium term.

Looks good though. Feeling confident that it won't be long before inflation is back below 3% provided the government doesn't blink, the Treasurer sounds resolute.

Even if it is, won't stay there very long. Will be re testing highs again within 2 years IMO....

 

[Knobby22]

The USA inflation is now getting to the stage that cuts will be required.
Ambrose says it will be too late to avoid a wave of bank failures,
It is predicted however there will be pressure to not provide the cuts from Trumpists who will want to put pressure on the Fed Chair, selected by Trump to provide political advantage.

Fed rate cuts come too late to avert a fresh wave of US bank failures

It’s a train wreck in slow motion: further stress in commercial property values could push another tier of lenders over the edge, leading finance experts warn.

www.theage.com.au

Why the US Federal Reserve may be Trump’s next target

MAGA attacks on the Fed are coming, and they should be treated as the bad-faith bullying they are.

www.theage.com.au

 

[basilio]

Nail. On. Head.

January 11, 2024

Inflation Falls as More People Cut Back on Luxuries Like Food and Shelter​

In encouraging news for consumers, data released this week revealed a fall in the rate of inflation, as people finally start to curtail their spending on extravagances such as lunch and a room to sleep in.
Economist Chris Lou said it was promising to see out-of-control spending finally ease in the economy.

“We’ve been in a sustained period of households splurging on three meals a day, sometimes with snacks as well. But now that the obsession with regular food seems to be coming to an end, we’re thankfully seeing some heat come off prices” he said.
He predicted rental prices would also start to fall as more people chose to live in their cars. “It’s great to see that excess demand finally starting to ease”.

After two years of high inflation, Commonwealth Bank economist Susan Foley said markets would be relieved to see the latest data. “As more people start to cut back on little luxuries like eating dinner and sleeping on a bed, we’ll start to see more stability in the markets which is good news for investors”.

 

[divs4ever]

Nail. On. Head.

January 11, 2024

Inflation Falls as More People Cut Back on Luxuries Like Food and Shelter​

View attachment 168686


In encouraging news for consumers, data released this week revealed a fall in the rate of inflation, as people finally start to curtail their spending on extravagances such as lunch and a room to sleep in.
Economist Chris Lou said it was promising to see out-of-control spending finally ease in the economy.

“We’ve been in a sustained period of households splurging on three meals a day, sometimes with snacks as well. But now that the obsession with regular food seems to be coming to an end, we’re thankfully seeing some heat come off prices” he said.
He predicted rental prices would also start to fall as more people chose to live in their cars. “It’s great to see that excess demand finally starting to ease”.

After two years of high inflation, Commonwealth Bank economist Susan Foley said markets would be relieved to see the latest data. “As more people start to cut back on little luxuries like eating dinner and sleeping on a bed, we’ll start to see more stability in the markets which is good news for investors”.

and we all have the deepest empathy ( not ) for that bank as well

nothing like mutual dispassion

and fellow members wonder why that bank is on my ' AVOID list ' well ahead of such woke disasters like WBC

 

[over9k]

Yank CPI comes in above estimates (3.4 vs 3.2), jobless claims below estimates (202 vs 210), yields now soaring again.

Markets continue to price in way too much way too early. Seems to have been the story of the last... 18 months or so?

Price in too much too early and then have to unwind it. Then price it all in again, then have to unwind it again. And so on, and so on...

 

[over9k]

Here's a bit of deflation:

Remember when I was saying how furniture/goods sales would be ridiculous during covid, several years' worth of purchases would be made in all of a few months, and then services would go bonkers in response to pent up demand and the prices of goods would fall off a cliff?



I'm tempted to offer them 1200 and see if they take it. The staff were absurdly helpful/friendly, if you take my drift.

 

[over9k]

Last time I used a taxi, an actual taxi not Uber, in casual conversation with the driver it turned out he is, wait for it……..

A doctor.

As in a GP. Driving taxis yes.

Says it all.

Just had my kebab made by a qualified pilot.

End result is we've an abundance of people with a degree but we're desperately short on people in the trades or even basic work like driving buses.

Funny you mention buses, a friend of mine runs one of those job centres (the ones that are contracted with the government/centrelink to help people find work) and the bus drivers in his city are now earning more than the fully qualified diesel mechanics that fix/maintain the very buses they're driving.

He was telling me how some of them are genuinely considering quitting their mechanic job and going and driving a bus for the company instead.

How's that for market forces.

Better recycle all of those books with the works of Shakespeare, Milton, Wordsworth, Mark Twain and all the other stupid gits into something more useful. May as well torch those paintings by Constable too. Useless things just taking up space on a wall. And that statue of David! Surely we can use it to make a kitchen bench.

If modern artists were producing works like this you'd have a point. Instead, we get paintings made with period blood.

The only thing in table around that level is accomodation and food services, Everything else in the table is below CPI!!

Sure doesn't look like a labour shortage to me.

Correct.

An easy soundbite/counter you can remember for this argument is that if there was actually a labour shortage, wages would be rising faster than inflation. It's literally that simple.

 

[Dona Ferentes]

the bus drivers in his city are now earning more than the fully qualified diesel mechanics that fix/maintain the very buses they're driving.

He was telling me how some of them are genuinely considering quitting their mechanic job and going and driving a bus for the company instead.

How's that for market forces..

TransDev buses returning to depot carry a "Now Hiring" across the destination sign, and have ads for new drivers
- $5,000 sign-on pledge
- pay for upgrades to licence
- above award.

But the drivers say they get stiffed, with split shifts, rosters that jump around, same old petty anti-union provocations.
-

 

[moXJO]

Aged healthcare services seem to be over employing people and then only able to give just enough shifts to everyone to just survive.
I wonder if they are getting some kind of government incentive and rorting it?

 

[over9k]

getting some kind of government incentive and rorting it

Probably contracted on a fixed fee and so are incentivised to grind everything/everyone into dust.

Problem is with the contract condition(s), not the providers. The government would have just contracted it to the lowest bidder and we all know how you become the lowest bidder.

 

[noirua]

Inflation risk from Red Sea disruption, warns economist

Attacks on global shipping could push up prices and quash interest rate cuts, a leading economist says.

www.bbc.co.uk

Red Sea threat lays bare economic risks ahead of US and UK elections | Richard Partington

Panic is confined to media headlines for now but Britain is as addicted as ever to Asian imports

www.theguardian.com

 

[Value Hunter]

A lot of companies are mentioning wage inflation in their results but to me it seems a bit of a scapegoat. Has anybody here actually received a pay increase of more than 6% in the past year for doing the same job at the same company? I am not really seeing first hand evidence of it (or even evidence in ABS statistics). Most people I see are getting pay increases of 3 - 5% which is well below the rate of CPI increases.

 

[Value Hunter]

Just had my kebab made by a qualified pilot.

Funny you mention buses, a friend of mine runs one of those job centres (the ones that are contracted with the government/centrelink to help people find work) and the bus drivers in his city are now earning more than the fully qualified diesel mechanics that fix/maintain the very buses they're driving.

He was telling me how some of them are genuinely considering quitting their mechanic job and going and driving a bus for the company instead.

How's that for market forces.

If modern artists were producing works like this you'd have a point. Instead, we get paintings made with period blood.

Correct.

An easy soundbite/counter you can remember for this argument is that if there was actually a labour shortage, wages would be rising faster than inflation. It's literally that simple.

I've always thought that mechanics are vastly underpaid. There are job ads on seek looking for highly experienced mechanics with 5 - 10 years of experience only paying around $100,000 per year. Aside from needing qualifications which take a long time to procure its hard and dirty work. Fewer and fewer people will want to become mechanics until eventually the industry will cry to the government about "labour shortages" which they caused with their own greed and short-sightedness and start pressuring the government to import mechanics from overseas.

If the immigration rort stopped in Australia companies would be forced to get their act together and raise wages to market clearing rates to entice people to enter that profession (or work for that particular company). Companies would also start hiring unskilled (or minimally skilled) people and have long-term training plans in place to train people (instead of complaining to the government to fix the "skills shortage" with immigration).

 

[divs4ever]

A lot of companies are mentioning wage inflation in their results but to me it seems a bit of a scapegoat. Has anybody here actually received a pay increase of more than 6% in the past year for doing the same job at the same company? I am not really seeing first hand evidence of it (or even evidence in ABS statistics). Most people I see are getting pay increases of 3 - 5% which is well below the rate of CPI increases.

that trend is fairly usual in periods of high inflation , normally those wage rises are linked to 'productivity increases '

so 'scapegoat ' is rather diplomatic

Paul Keating tried another tac , and introduced compulsory super , as a partial offset to wage demands at the time

and here we are

calls for higher contributions in compulsory super and inflation a problem once again

 

[mullokintyre]

A lot of companies are mentioning wage inflation in their results but to me it seems a bit of a scapegoat. Has anybody here actually received a pay increase of more than 6% in the past year for doing the same job at the same company? I am not really seeing first hand evidence of it (or even evidence in ABS statistics). Most people I see are getting pay increases of 3 - 5% which is well below the rate of CPI increases.

The problem is that a 3-5% increase in base wages for an employee ends up being 5 to 7% increase for the employeer.
Factor in Increases in sick leave, long service leave, super, annual leave and its associated loading, the myriad of special leave for family, bereavement, parental leave etc etc and before you know it the employer factors in a 30% on cost for employees.
Mick

 

[Smurf1976]

The problem is that a 3-5% increase in base wages for an employee ends up being 5 to 7% increase for the employeer.
Factor in Increases in sick leave, long service leave, super, annual leave and its associated loading, the myriad of special leave for family, bereavement, parental leave etc etc and before you know it the employer factors in a 30% on cost for employees.

Agreed about the various on costs being substantial but how do those things increase by a greater amount than the employee's pay increase?

If an employee is paid 5% more then that doesn't become more than 5% for sick leave, long service, super etc they all go up exactly 5% too.

 

[over9k]

A lot of companies are mentioning wage inflation in their results but to me it seems a bit of a scapegoat. Has anybody here actually received a pay increase of more than 6% in the past year for doing the same job at the same company? I am not really seeing first hand evidence of it (or even evidence in ABS statistics). Most people I see are getting pay increases of 3 - 5% which is well below the rate of CPI increases.

Depends whose wages.

Grunts might be getting next to nothing and the C-suite all have their salaries doubled so then the company could be making a wage increase claim based on an aggregate.

"Wage costs" in total increased by X amount but who actually got the increases?

 

[moXJO]

I've always thought that mechanics are vastly underpaid. There are job ads on seek looking for highly experienced mechanics with 5 - 10 years of experience only paying around $100,000 per year. Aside from needing qualifications which take a long time to procure its hard and dirty work. Fewer and fewer people will want to become mechanics until eventually the industry will cry to the government about "labour shortages" which they caused with their own greed and short-sightedness and start pressuring the government to import mechanics from overseas.

If the immigration rort stopped in Australia companies would be forced to get their act together and raise wages to market clearing rates to entice people to enter that profession (or work for that particular company). Companies would also start hiring unskilled (or minimally skilled) people and have long-term training plans in place to train people (instead of complaining to the government to fix the "skills shortage" with immigration).

Many have started only take on jobs that are easily found and fixed. Major tear downs are shunned. I'm noticing this is happening across a few different industries. Business will only fix something that's easily diagnosed with minimal amount of time to fix. If it's difficult they pass it along.

Some jobs are a pain to find and there's a ceiling on how much you can charge.
Some of the older guys are caught in charging too cheap. You just end up run off your feet and just getting by.

 

[JohnDe]

A lot of companies are mentioning wage inflation in their results but to me it seems a bit of a scapegoat. Has anybody here actually received a pay increase of more than 6% in the past year for doing the same job at the same company? I am not really seeing first hand evidence of it (or even evidence in ABS statistics). Most people I see are getting pay increases of 3 - 5% which is well below the rate of CPI increases.

My staff received the compulsory superannuation increase, plus I gave them a pay rise. The pay rise was because my staff are like family, and I want to keep them happy and with my firm. I know of many other businesses that have given their staff pay increase, knowing that the cost of living is excessively high, and not wanting to lose staff that may start looking for another job with higher pay.

If your small business has employees, or hires eligible contractors, you'll need to ensure your payroll and accounting systems are updated to reflect the new super guarantee (SG) rate of 11% for payments of salary and wages you make from 1 July.​

​

The super guarantee rate is increasing | Australian Taxation Office

From 1 July, the super guarantee rate will increase to 11%.

www.ato.gov.au

​

 

[JohnDe]

that trend is fairly usual in periods of high inflation , normally those wage rises are linked to 'productivity increases '

so 'scapegoat ' is rather diplomatic

Paul Keating tried another tac , and introduced compulsory super , as a partial offset to wage demands at the time

and here we are

calls for higher contributions in compulsory super and inflation a problem once again

A lot of people forget that the compulsory superannuation is part of the wage/pay structure.