The state of the economy at the street level

[Dona Ferentes]

Back on theme, assuming foot traffic translates to dollars spent. And it would be fair to assume the city is an 'event destination' with workers still not returning as beforr 2020, and likely flexible work is as attractive ad working from home. .....

Sundays now busier than Mondays, and evening activity significantly higher, new data from the City of Melbourne reveals.

Peak-hour commuter activity at Flinders Street Station remains just 59 per cent of pre-COVID levels. Tuesday is the busiest day, at 64 per cent, amid the decline of the Monday to Friday city office worker.

The retail sector is suffering, with foot traffic near the Bourke Street Mall just 71 per cent of pre-COVID levels. Foot traffic is now highest on a Saturday.

However, families and workers are coming into the city much more at night and on the weekends and international students have returned, pushing up night-time activity by 24 per cent increase across the city in June.

Student activity near Melbourne University is also returning, up 20 per cent compared to the same time last year and strongest on Tuesdays, Wednesdays and Thursdays and now at 82 per cent of pre-COVID levels.

 

[JohnDe]

Everything negative has a positive. The current hardship many voters are experiencing may sharpen the dullards that fall for socialist ideas and social-engineering.

The length of the Costco bowser queue tells us more about the real-world economy than we could learn from listening to ABC Radio National for a fortnight.​

​

When customers finish loading their tanks and then drag out a couple of jerry cans from the boot, it’s a fair bet the cost of living weighs more heavily on their minds than, say, an Indigenous voice to parliament.​

Labor’s ideological obsessions foiled by cost-of-living reality

Weekend customers at the BP service station in Double Bay were showing no apparent signs of pain, despite paying $2.53 for a litre of premium unleaded petrol.

Some 40km to the west, however, in the badlands beyond the M5 tunnel, the fuel queue at Costco in Casula stretched out of the forecourt and back to the roundabout. A 15-minute wait seemed a small price to pay for a saving of 60 cents a litre.

The length of the Costco bowser queue tells us more about the real-world economy than we could learn from listening to ABC Radio National for a fortnight.

When customers finish loading their tanks and then drag out a couple of jerry cans from the boot, it’s a fair bet the cost of living weighs more heavily on their minds than, say, an Indigenous voice to parliament.

While the Prime Minister has been fighting the culture wars and creeping around the edge of the Matildas’ victory celebrations, his Treasurer has been out doing the hard yards on breakfast TV.

“Treasurer, you’re a top bloke,” Sarah Abo began on the Today show, “and we keep hearing from you about how the government is doing all it can to try and help households out here. But that just doesn’t seem to be enough.”

Jim Chalmers countered the best he could. Extra subsidies for early childhood education, relief for electricity bills, rent assistance and cheaper doctor visits.

Yet talking points from May’s federal budget could not refute Abo’s point that whatever the government thinks it’s doing, it doesn’t seem to be doing enough. But Chalmers can only work with the material to hand and, after 15 months in government, that’s not very much.

Labor promised better wages for Australian workers, highlighting the gap between the 3.5 per cent rise in the cost of living in the Coalition’s last year and the 2.3 per cent rise in wages. In the 12 months to the end of March this year, the gap between wages and inflation blew out to 5.9 per cent, with wages rising by 3.7 per cent and a 9.6 per cent increase in the cost of living for employed households.

A far uglier set of statistics lies hidden under the thickening fog of economic illiteracy that envelopes the national debate. Productivity is in free fall, tumbling in the March quarter by 4.7 per cent, the highest drop since records began. It continues the steep downward trend that began in the first half of last year.

For economic realists, the fall in wages in real terms will be a relief since productivity is inexorably connected to remuneration and the level of employment. It is a link, however, that Labor refuses to accept, proffering less conventional explanations for low income growth such as wage theft, profit gouging or other forms of mean and tricky behaviour by employers. Yet raising wages by fiat, like the 5.7 per increase to the minimum wage, will only reduce the chances of minimum-wage workers getting a job in the first place, particularly in a tightening employment market where productivity is falling.

In his recent speeches, falling productivity and stubborn inflation have been top of mind for retiring RBA governor Philip Lowe. The challenge, said Lowe, is not knowing what do to. We have a Productivity Commission to do that. What needs to be added is the political will to do it, since the measures outlined by the PC in its recent five-year inquiry range from the politically un-sexy to the politically poisonous. Of the 71 recommendations, 15 are education reforms and seven require changes to workplace regulation. Eight deal with climate and energy policy, arguing the energy transition should be made at least cost, with indifference to the type of technology. For a government that remains firm in its irrational opposition to nuclear energy, that may be one of the most unpalatable recommendations.

There is an alternative to following the PC’s recommendations, which is to keep faffing about with the same unserious policies. That, says Lowe, would mean “condemning our citizens to slower growth in real wages, smaller public services and an increased tension on income distribution”.

That is not a goal Labor would want to pursue, yet the party’s ideological fixations and bullying bedfellows from the unions make the productivity challenge much harder. The proposed same job, same pay legislation is wilfully blind to the difference in productivity between workers with differing skills, experience, intelligence, strength or capacity for hard work. The return to industry-wide bargaining supported by Labor denies differences in productivity between businesses, let alone individual workers.

Entrepreneurial agility and workplace flexibility are essential for the innovation that increases productivity. Yet Labor’s instincts to tax and regulate push in the opposite direction.

While a genuine recession may seem unlikely, the chance that Anthony Albanese may be the first recessionary prime minister since Paul Keating increases by the day. The consumer confidence index, another set of ugly forward-facing figures, points to harder times ahead.

Seasonally adjusted consumer confidence appears stuck at its lowest level since 2010, when the RBA first collated the figures using the Westpac-Melbourne Institute survey.

In the first seven months of 2020, in the early, uncertain days of the Covid pandemic, consumer confidence averaged 89. In the first seven months of 2023, it has averaged 81. In other words, the sharp, V-shaped downturn during Covid has been followed three years later with a precipitous downward slope that signals a profound downturn from which there is no escape as long as this economically jejune government remains in power.

Albanese better start gathering his excuses for breaking his cost-of-living election promises. A $275 cut in the annual household power bill looks like a bad joke. Ditto the promise that wages would keep pace with inflation.

The chance that Albanese may preside over the first single-term government since the Second World War may be less remote after the potential punishment of losing the voice referendum. He will be diminished in the eyes of those who care about these things and distant from those who don’t. For them, this pointless excursion into race politics will further prove that today’s card-carrying members of the Labor Party have little in common with card-carrying members of Costco.

Nick Cater is senior fellow at the Menzies Research Centre.

 

[qldfrog]

The productivity fall is a killer no one mentions much but do not be surprised, with WFH being an open license for slacking for many..wait for the shrieking reactions there.
And the longer it goes the worse, especially for the BS jobs which are now a fair proportion of white collars.
Jobs with no real purpose/ need, that are even known as such by the workers . Most common in PS and big corporates...move these to the work from home and it is childcare video games FB party time...

 

[moXJO]

Barber that's normally busy was very quiet. Suppliers are quiet.

 

[JohnDe]

Mate manages the local seafood distribution warehouse, said it is quiet.

 

[rcw1]

Mate manages the local seafood distribution warehouse, said it is quiet.

Hi JohnDe,
If rcw1 was there, your mate wouldn't be quiet, far from it... luv seafood ... catch of the day always a big seller... in more ways and one!!!

Have a very nice evening.

Kind regards
rcw1

 

[JohnDe]

Hi JohnDe,
If rcw1 was there, your mate wouldn't be quiet, far from it... luv seafood ... catch of the day always a big seller... in more ways and one!!!

Have a very nice evening.

Kind regards
rcw1

He reckons that consumers are buying cheaper imports from supermarkets, and restaurants have decreased their fresh seafood orders.

 

[rcw1]

He reckons that consumers are buying cheaper imports from supermarkets, and restaurants have decreased their fresh seafood orders.

Yep, reckon so too, JohnDe, there certainly are periods of time where it is hard to get some varieties of seafood, and cheaper imports are the preferred option by consumers. Restautant's do go the dark side and buy overseas ****. Quality not there. Biggest charade is Barramundi. The imported barra completely different. Always ask where the seafood is from, ... if they don't know or they admit overseas... walk out... unless of course you are starving then you eat anything.. ha ha ha ha...

We only buy Australian even if more expensive. Always buy locally, caught locally... and loyal to the local communities which we operate. The best of the best prawns are 'wet' prawns; find them and you get the very best doesn't matter which variety; these days the vast majority are caught, processed and snap-frozen at sea before being sold.

Obviously, locally, it may not be possible to get everything all the time that you might want fresh, the best of the best, coral trout, red emperor, Fingermark, Mangrove Jack, mud crabs, prawns, oysters, so ... the truth is; the fresher the better... puck the imported ****.

Kind regards
rcw1

 

[moXJO]

Scrap metal yard is empty. There's no scrap iron.

 

[wayneL]

Scrap metal yard is empty. There's no scrap iron.

What does that mean, Mo?

 

[Dona Ferentes]

Just reading anecdotes on the extraction of cash from the ATO by the so-called tik tok fraud, and it would be fair to say the infusion of cash in communities has helped fund various activities, such as the drug trade in localities.

Some 46,000 cases are mentioned, by setting up or reactivation of accounts for BAS and then applying for GST rebate on dubious or non-existent claims. While social media has been part of the spread, word of mouth has played a big part.

The ATO has now closed this off, and a boost in the billions has been removed.

 

[divs4ever]

What does that mean, Mo?

well my info in this area is fairly old , BUT there were complaints of low prices paid ( for scrap collectors ) , rising transport costs , increasing paperwork

basically not worth the effort

 

[Dona Ferentes]

huh?

“In Australia, our performance remained stable as well at minus 5%, which reflects the weak consumer sentiment”
- Alexander Lacik, CEO, Pandora Group [world’s largest jewellery brand]

 

[dyna]

huh?

Confusing alright. Today's Weekend AFR reports luxury brand retailers , in Sydney at least , are going gang busters. What recession ?
Well -to -do punters in this country spent over $ 5 Billion on bling last year .
( ATO , Be Advised ! There 's your missing $ Billions , Go get 'em . )

 

[divs4ever]

Confusing alright. Today's Weekend AFR reports luxury brand retailers , in Sydney at least , are going gang busters. What recession ?
Well -to -do punters in this country spent over $ 5 Billion on bling last year .
( ATO , Be Advised ! There 's your missing $ Billions , Go get 'em . )

depends on what is being sold , for example high end watches might be used as investments/collectibles , and similar with jewelry

and of course there are always 'wannabes ' trying to impress above their pay-grade ( and of course those trying to transport their wealth outside Australia discretely )

 

[frugal.rock]

Well -to -do punters in this country spent over $ 5 Billion on bling last year

I had thought in general from reports read, that the luxury brands had experienced a small downturn, but it was anticipated that the downturn was from the credit spending brigade which largely had reached the end of debt provision stages and were now stuck in debt pay down for an extended period of time/ or credit default/ delinquency scenarios.

It's not the well heeled who need, or are, having to control their spending. The IF brigade (inflation fuelers) ?

 

[JohnDe]

A slowing economy is easily seen on the street. The number of vehicles on busy roads have dropped. Cafes, craft brewers, and restaurants are advertising more and in different ways to try and get foot traffic in. Sales reps are telling me that they made budget last month, but it all came in the first three weeks of the month, the last week of the month was like a holiday.

Economy slows in June quarter as rates, cost of living bite

The economy continued to slow through the year to June, with annual growth decelerating to 2.1 per cent, from 2.3 per cent in March.

The most aggressive rate hike cycle since the 1980s and cost of living pressures flattened growth in consumption in the latest quarter, even as a strong export performance and robust business investment propped up activity.

Real GDP expanded by 0.4 per cent in the three months to June, unchanged from an upwardly revised 0.4 per cent in the March quarter, according to the Australian Bureau of Statistics.

After accounting for the bounce in population growth thanks to a resurgence of migration over the past 12 months, real GDP on a per capita basis dropped by 0.3 per cent, the data showed – the second consecutive quarterly decline.

Jim Chalmers told a press conference in Canberra that the outcome was “a steady and a sturdy result in difficult circumstances”.

The Treasurer said he still expected the economy to “slow considerably over the next year” as hundreds of thousands of mortgage holders shift off ultra-low fixed interest rates, and the global outlook becomes more fraught as China stutters.

Nonetheless, Dr Chalmers remained “optimistic” about the future, saying Australia through 2022-23 “was one of the fastest growing advanced economies through the year to June”.

“We face these challenges from a genuinely enviable position. We have an unemployment rate with a three in front of it still, remarkably, (and) wages growing around their fastest pace in a decade,” he said.

While the national accounts suggested the economy finished the recent financial year in relatively good shape, the figures pointed to the growing financial pressure on households.

Homeowners shelled out nearly $83bn in mortgage interest repayments in the 2022-23 financial year, double the previous year’s bill, the ABS data revealed.

With inflation still high, consumption scraped ahead by 0.1 per cent in the quarter, from 0.3 per cent in the previous quarter.

Unsurprisingly, Australians also saved less, with the household savings ratio falling to a 15-year low of 3.2 per cent, from 3.6 per cent in March after last peaking at above 19 per cent in September 2021.

ABS head of national accounts Katherine Keenan said “the fall in the household saving ratio was driven by higher interest payable on dwellings, income tax payable and increased spending by households due to the rising cost of living pressures”.

Economists expect the delayed impact of a dozen rate hikes since May 2022 will act as a further brake on spending and activity through the second half of the year.

More to come.

PATRICK COMMINS ECONOMICS CORRESPONDENT

 

[Smurf1976]

A slowing economy is easily seen on the street.

I haven't personally noticed much but I did contact a trades business this morning about doing some work at home.

In short they'll be on site tomorrow morning.

It's only a straightforward task, I'm paying them more for use of their equipment and getting rid of the rubbish than actual skill as such, but I guess things can't be too busy if they're keen to come and do it the very next day. Bargain price too.

 

[wayneL]

I haven't personally noticed much but I did contact a trades business this morning about doing some work at home.

In short they'll be on site tomorrow morning.

It's only a straightforward task, I'm paying them more for use of their equipment and getting rid of the rubbish than actual skill as such, but I guess things can't be too busy if they're keen to come and do it the very next day. Bargain price too.

I thought I was seeing definite signs of a slow down a few months ago, but not so much now.

Real estate in my area, all 7 figures, is flying off the shelves so long as it is not
ridiculously overpriced.

This all goes against my overall economic thesis, at least in the area in which I reside.

I remain bearish overall, but doff my cap to the permabulls, for now.

 

[JohnDe]

I thought I was seeing definite signs of a slow down a few months ago, but not so much now.

Real estate in my area, all 7 figures, is flying off the shelves so long as it is not
ridiculously overpriced.

This all goes against my overall economic thesis, at least in the area in which I reside.

I remain bearish overall, but doff my cap to the permabulls, for now.

Realestate in my extended area is selling like hotcakes, and at ridiculously high prices that seem to keep increasing. I don’t know if it’s something that will continue because of investment dollars from immigration and overseas investors, or the edge of the cliff when madness takes over from rational thought.