The Dismal Science

When the RBA cut rates back in February this year it sounded cautious. This time it sounded confident. At least kind of. It also sounded pretty uncertain about the global economy...but then who isn't these days? This week's episode of the pod gives its quick take on the May 2025 rate cut and the prospects for more to come.  For more insights from the AICD's Chief Economist Mark Thirlwell head to https://www.aicd.com.au/news-media/economic-weekly.html.

In this week's episode, we unpack the post-election market rally, Trump's unexpected retreat on tariffs and renewed trade talks with China, fresh data on wages and unemployment, and what to expect from next week's RBA meeting. A quick but sharp look at the key economic signals shaping the week. For more from AICD's Chief Economist Mark Thirlwell, head to: https://www.aicd.com.au/news-media/economic-weekly.html

The RBA's new Monetary Policy Board meets later this month to consider the case for a second rate cut in the current easing cycle. What will it make of Australia's election campaign, this week's inflation numbers, the recent rash of international forecast downgrades from the IMF, WTO and World Bank, and ongoing global trade policy uncertainty? Still high on Easter chocolate, the pod offers its unsolicited advice. 

Instead of the traditional Easter Egg, the Dismal Science pod has a quick take on the implications of 'Liberation Day' and its aftermath in its Easter basket. It's tariff free! (Note, contents may include some discussion of trade policy tools.) For more economic insights from the AICD's Chief Economist Mark Thirlwell, including his weekly economic update, head to: https://www.aicd.com.au/news-media/economic-weekly.html.

In this live from the Australian Governance Summit episode, hosts Raphael Dixon and Mark Thurwal analyze current economic and geopolitical developments. They discuss the "Trump trade" market fluctuations, US CHIPS Act's mixed impact on semiconductor manufacturing, and China's growing chip capabilities. The conversation covers Germany's potential defense spending increase, US steel tariffs affecting Australia, contradictions in US onshoring and immigration policies, and the possibility of talent flowing from the US to countries like Australia. Throughout, they offer practical investment guidance for navigating uncertain markets. Subscribe to Mark's weekly newsletter here

This week on the Dismal Science, Raphael and Mark dissect the latest Australian GDP figures, revealing the end of the per capita recession, though productivity remains a concern with a third consecutive quarter of falling GDP per hour worked. Turning their attention to the global stage, they examine the evolving economic landscape in the United States, with the Atlanta Fed now forecasting contraction and the impact of newly implemented tariffs. They explore how these factors, coupled with significant geopolitical uncertainties including the suspension of US military aid to Ukraine, are contributing to market jitters and a shifting focus away from previous narratives like AI. Finally, they consider the potential economic ramifications of the US Department of Government Efficiency (Doge) initiative. Read Mark's weekly newsletter here: https://www.aicd.com.au/news-media/economic-weekly.html  

This week, Raphael and Mark dissect the latest inflation data and react to recent rate cuts, examining whether the soft landing declared by the IMF is truly secure. Mark shares a sneak peek of his upcoming article in Company Director magazine, outlining eight key global uncertainties that could derail the current economic outlook. They explore topics such as diverging central bank rate paths, the impact of a potential Trump administration, the fraying rules-based international system, demographic transitions, technological revolutions (AI, bioscience, energy), the energy transition, state-based armed conflict, and domestic political uncertainty. Despite the risks, is there room for optimism, or are we heading towards a "G-Zero" world? Read Mark's weekly newsletter here: https://www.aicd.com.au/news-media/economic-weekly.html

We're back, and we force Mark to take a victory lap for his February rate cut prediction! We dive into the details of the RBA's decision and its implications for future cuts. Then, we dissect the market freakout following the release of Deepseek's open-source AI model. What does it say about AI market leaders' valuations, the effectiveness of export controls and the future of AI? Finally, we discuss the return of "Tariff Man" and the potential for a Smoot-Hawley moment.

We're taking a break from our usual format to look at some of the big technological and economic themes of 2024, and where they are going in 2025 and into the future. Mark and Raph discuss the explosion of AI and where it might be headed, as well as its impact on financial markets. We contemplate what might constitute the next big wave of global innovation. Will AI prove to be transformative or merely a sustaining innovation? And could the changing geopolitical landscape mean the end of hyper-globalisation? We will be back with our regular episodes in February.  If you enjoyed or hated this episode, we'd love to hear your feedback! Send us an email: podcasts@aicd.com.au

This week we are joined by Su-Lin Ong, Managing Director, Chief Economist & Senior Corporate Relationship Manager of RBC Capital Markets. Together Mark and Su-lin reflect on Australia's economic conditions and the RBA's 2024 performance. They unpack why the RBA has held interest rates steady for so long – and what this means for Australia's economic outlook, including a (mild) disagreement on the outlook for interest rates. Plus, they discuss the impact of a new US administration, the RBC's unique projections, the global easing cycle, and how Australia stacks up against the rest of the world. Subscribe to Mark's weekly column here: https://www.aicd.com.au/news-media/economic-weekly.html

The RBA keeps interest rates on hold, but the big news is a change in tone that suggests Mark's long predicted February rate cut is back on the table. Also, Mark looks back at his predictions from a year ago, revisiting his forecasts for inflation, unemployment, and economic growth. Get your ticket to AGS: https://www.aicd.com.au/events/australian-governance-summit.html Subscribe to Mark's weekly column here: https://www.aicd.com.au/news-media/economic-weekly.html

This week, we examine Australia's latest soft GDP figures. The headline number is a weak 0.3% quarterly expansion, the lowest rate of annual growth since the pandemic with private sector demand contributing nothing to this meager growth figure. Will the RBA stay the course with rates on hold in the face of a deepening per capita recession and falling living standards? We also look at what's driving Australia's poor economic performance relative to other OECD nations. Get your ticket to AGS: https://www.aicd.com.au/events/australian-governance-summit.html Subscribe to Mark's weekly column here: https://www.aicd.com.au/news-media/economic-weekly.html    

This week, the Dismal Science turns its attention to Europe's economic powerhouse - Germany. We examine the country's recent economic struggles, exploring the reasons behind its faltering performance, including the war in Ukraine, rising energy costs, and the rise of Chinese manufacturing. We discuss whether these challenges are merely cyclical or point to deeper structural issues with the German economic model. With a shrinking workforce, rising fiscal pressures, and declining global trade, is “Germanification” a cautionary tale for other advanced economies, including Australia? We also examine the impact of China's growing dominance in key industries, particularly the automotive sector, where Chinese companies are now leading the world in EV production. Can Germany adapt and compete, or is its era of economic dominance over? Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html   Send feedback to: podcasts@aicd.com.au

This week on the Dismal Science, Mark and Raph take a look at the latest Australian labour market figures and what it means for Mark's increasingly shaky call for a February rate cut. Is the RBA being too pessimistic about what the unemployment rate associated with full employment needs to be? Plus, the Dismal Science takes a metaphorical visit to Baku for COP 29 and finds “upside-down geopolitics” at play. And will President Trump's reelection derail the action items out of COP29? Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html Send feedback to: podcasts@aicd.com.au

Join Mark and Raph to unpack the potential economic implications of the US election result. We examine some of the key economic policy pledges that President Elect President Donald Trump made during the campaign, from tariffs to taxes, and discuss the possible ramifications for interest rates, inflation, growth, and other economic variables. President Trump's proposals could send US average tariff rates to their highest level since the 1934 Great Depression. What would this mean for inflation, the US dollar, and the global economy? We also explore the potential impact of tax cuts and deregulation on growth and profits, as well as the implications for the Federal Reserve and US debt and deficits. And is this a sign of a broader global shift away from neoliberalism? Tune in to find out. Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html Send feedback to: podcasts@aicd.com.au

This week on The Dismal Science, we examine the latest economic data releases, including wage growth figures, consumer and business sentiment surveys, and the AICD's Director Sentiment Index. The Wage Price Index showed annual growth slowing to 3.5%, a welcome development for the RBA in its fight against inflation. But with productivity growth stalling, will this be enough to see interest rate cuts in the near future? Consumer sentiment surged in November, reaching its highest level since the first half of 2022, fuelled by optimism about the interest rate outlook and a strong labor market. However, this optimism was tempered by the results of the US election, with sentiment declining sharply following the outcome. Businesses also reported improved confidence in October, but the AICD's survey of directors painted a much bleaker picture, with concerns about inflation, interest rates, and a looming recession weighing heavily on sentiment. Will the recent positive economic data prove to be a fleeting reprieve, or are we finally turning a corner? Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html Send feedback to: podcasts@aicd.com.au

The big news this week is the US presidential election. Markets are reacting in real time as results come in - we look at the volatility and what it means for Australia. Closer to home, the Reserve Bank of Australia (RBA) left interest rates unchanged for the eighth consecutive month. We examine the RBA's latest forecasts, which suggest a slightly softer economic outlook than previously predicted, with lower GDP growth, higher unemployment and slower inflation. But is this bad or good when it comes to taming inflation? Mark explains why this could actually be good news for those hoping for an interest rate cut. Also on the agenda: the role of government spending in keeping the economy afloat, and whether now is the time for businesses to start investing. Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html   Send feedback to: podcasts@aicd.com.au

This week we look at the latest Australian inflation figures. The September quarter CPI figures came in slightly better than expected, with the headline numbers showing a decrease in inflation. This was largely driven by government rebates and falling fuel prices. However, services inflation remains stubbornly high. Additionally, some commentators are suggesting a December rate cut is possible...will Mark hold firm to his February prediction? Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html Send feedback to: podcasts@aicd.com.au

Today we have an in-depth look at the IMF's latest World Economic Outlook report, before returning home to dissect the bumper jobs numbers and latest consumer confidence numbers. In brief, it was an optimistic outlook from the IMF, begging the question, is central bank credibility back? With that said, champagne flutes should remain in the fridge, as there are still a litany of risks to the global economy identified, and suggestions put forward for both governments and bureaucrats - but how likely are they to happen? And then we revisit Mark's February prediction of our first rate cut in light of huge jobs numbers, and increasing consumer sentiment. Read more from Mark on the AICD website: https://www.aicd.com.au/news-media/economic-weekly.html Send feedback to: podcasts@aicd.com.au  

Another week, another economic roller coaster.   Join Mark and Raph to discuss the recent volatility in oil prices, driven by factors including the Israel-Iran conflict and speculation about Chinese stimulus measures. We then unpack the latest RBA minutes, analysing the central bank's current thinking on interest rates and its assessment of the economic outlook. Have they made a dovish turn? Finally, we take a look at the latest consumer and business confidence figures. Are Australians feeling more optimistic about the economy? Well, as usual these days, the story is mixed... If you'd like to give us feedback, feel free to email us at: publications@aicd.com.au And for a deeper dive, read Mark's weekly columns here.  

Much to discuss on the agenda today.  We unpack recent housing data, exploring the slowdown in price and rent growth alongside lagging approvals. Retail sales showed strength - but the RBA and other analysts disagree on why. Were they impacted by the weather, stage 3 tax cuts, or an early father's day? Mark will be the judge. Additionally, Australia has hit a fiscal milestone with back-to-back budget surpluses for the first time since the Global Financial Crisis, while the Productivity Commission has provided a sobering update on our productivity growth.  Finally, we'll discuss the dizzying array of factors impacting oil prices on top of the escalating Middle East conflict and what this means for the global economy.   

We begin with a look at recent inflation data. While headline inflation has decreased, Mark explore why the underlying numbers suggest continued vigilance is necessary. Our discussion then turns to the Reserve Bank of Australia's latest decision to maintain current interest rates. The focal point of our episode is China's economic situation. We address: The ongoing property sector challenges Weak consumer sentiment and deflationary pressures Policy responses from the People's Bank of China, including: Interest rate reductions Easing of bank reserve requirements Mortgage rate adjustments Liquidity measures for equity markets We evaluate these interventions and their potential impact on China's economic trajectory, considering both domestic and global implications. For a deeper dive into the weekly figures and trends, visit AICD Chief Economist Mark Thirlwell's weekly column.

In this short but packed episode, we go through the complex economic landscape facing Australia and the world. We discuss the significance of the still tight Australian labour market and its implications for monetary policy, dissect why the US Federal Reserve decided on a rather large 50 basis point rate cut, and explore how Middle East tensions could spark global economic instability. All these factors set the stage for a complex upcoming Reserve Bank of Australia meeting. We love to hear your feedback, email us at: publications@aicd.com.au

Prompted by proposed changes to Australia's Reserve Bank, as well as increased criticism of central banks globally, today we discuss what central bank independence means, its historical development, and the evidence for its effectiveness. Mark analyses key moments in the formation of modern central bank theory including "The golden age of central banks " of the pre-2008 era , the impact of the Global Financial Crisis, and the post-COVID inflation shock. We also discuss the implications of central banks acting as  "accountability sinks" and explore current challenges to their independence. This episode aims to provide context for ongoing debates about the role of central banks in modern economies and why these issues matter. We'd love to hear from you as to whether you would enjoy more episodes that provide this type of context, would rather we stick to the latest data, or anything else! Please email us at: publications@aicd.com.au You can find more of Mark's analysis, including weekly economic data here.  

We welcome back AICD Chief Economist Mark Thirlwell, fresh from his holiday, as we dive into the market turbulence that peaked while Mark was celebrating his dad's 80th birthday in Saltburn. We explore the Reserve Bank of Australia's decision to hold steady on rates, as anticipated, and examine the global interest rate landscape, including hints of US rate cuts following the Fed Chair's speech at Jackson Hole. We also dissect the clash between market expectations and the RBA's timeline for cutting rates in Australia. Plus, we take a closer look at the latest GDP report: with six consecutive quarters of per capita recession, growth driven largely by population expansion and public spending, and signs of weakness in the private sector as household consumption, savings, and private investment all fell.  

It's our 200th episode and Ivan's last ever :( Mark turns the tables on him and asks what's changed in economics since we started the podcast and what he's learned along the way. Plus, an experiment in UBI and what we can expect from Trumponomics and Kamalanomics. A big thank you to all of our listeners for getting us this far. 

Mark Thirlwell is once again joined by Raphael Dixon to discuss the new consumer confidence survey, reavling falling confidence a drop, as well as expectations of an interest rate rise jump. Raph asks the question: doesn't this mean that we don't need to raise rates then because consumer behaviour has factored a raise in? Topic two discusses the unlikely "marriage of convenience" between some renting mellenials and some debt free baby boomers, both hoping for rate hikes And finally, birth rates: how do governments use fiscal policy to encourage people to have more babies? So far, not much seems to work.   Referenced articles: The Economist - Can the rich world escape its baby crisis? (paywalled) IMF - The New Economics of Fertility  

Mark regails us with the vibe on the ground in Canberra. Plus, an around the grounds on: • RBA Minutes • Core logic house and rent price data • Retail sales numbers • Job ads And the number of the weke this week asks; if climate change results in supply shocks become increasingly regular to the point of predicibility, should food inflation still be excluded from core inflation numbers?

Monthly infaltion numbers have come in hot, adding pressure on the RBA to lift rates. What does the upcoming French election tell us about Britain, bonds and post-covid fiscal policy? And does the much hyped Guzman Y Gomez IPO and subsequent share price pop suggest that burritios are recession proof? 

Trade with China continues to flourish despite strategic and political tension. Does Chinese Premier Li Qiang's visit to Australia mean we can continue to, as the Chinese saying goes, pull strongly against the raging tide? Plus, hawkish sounds from the RBA as the path grows ever narrower and the effect of WFH on real wages.

An end to the era of globalisation has led to developing countries once again falling behind. As the costs of fragmentation become apparent, should a small open economy be doing more to bring back global trade? Plus, continuing resilience in the jobs market, continuing weakness in overall growth, and higher for longer rates in the US.

Global shipping is gummed up again with Houthi attacks in the Red Sea, renewed pirate attacks in the Gulf of Aden, and drought affecting the Panama canal. But could it get even worse? Plus, inflation picks up again in Australia and retail sales remain stagnant.

New Zealand economist Roger Dennis advises boards globally on long-term thinking and foresight. We spoke to him on how directors should think about the seemingly endless proliferation of risks, what he calls the paradox of perparedness, and whether Kiwis, living on the edge of the world, have a unique perspective on risk. For more of Roger's thinking, visit his website.

The treasurer had a juggling act to perform in this budget: fiscal repair, cost-of-living relief, inflation reduction and productivity growth were all balls to keep in the air. How did he do? Plus, the job market weakens and wage growth falls.

The yen has plunged to a 34 year low requiring the Bank of Japan to spend billions to prop it up. Why are hedge funds attacking the yen? Plus, we preview the budget, higher for longer interest rates in the US and a weak retail sales number.

A Cook's tour of the global economy: we take in the European malaise, the Trump spectre over the US, the China shock 2.0, and a resurgence in migration.

Inflation remains stubborn in Australia, running hotter in the March quarter than economists expected. Is there now a chance that the next rate move might be up again rather than down? Plus, a slight softening in the jobs market and just how much does negative gearing impact property prices?

Industrial policy is making a comeback globally and Australia wants in on the action. Boosting supply chain resilience, accelerating the net zero transition, and mitigating geostrategic risk are touted as key benefits. But does it stack up economically? Plus, new stricter merger rules and more mixed confidence results.    

A review into the supermarket code of conduct landed this week, raising fresh questions about competition. Can we raise prices for suppliers, while also lowering prices for consumers? Would increasing competition lead to more innovation? Or has the supermarket experience improved despite the lack of competition? Plus, strong US jobs numbers and an infleciton point in the AICD's Director Sentiment Index.

Questioning the official labour market data used to be the preserve of conspiracy theorists, but the surveys across the globe have been plagued by problems recently. Can we continue to trust these key economic indicators? Plus, dovish noises from the Reserve Bank on interest rates, as inflation continues to ease, though house prices march on.

Live at last week's Australian Governance Summit, we asked what could be done about Australia's languishing productivity: can policy make a difference? Will AI save us? Could it be as simple as building more houses? Plus, a first rate cut might be nearing and an extraordinary plunge in the jobless rate. Regular listeners will notice some snazzy new cover art this week. Thanks to our fantastic designer Jana Clark and photographer Graham Jepson for the fresh look.

Australia's GDP per capital continues to go backwards as growth slows to snail's pace. Plus, we look ahead to next week's RBA meeting, Powell hints interest rate cuts might be imminent in the US and more Swiftonomics.

Inflation is falling but so is growth, is the path to a soft landing for Australia narrowing still? Plus, a deal for what it's worth at the WTO and the UK economy as Willy Wonka experience.

The World Trade Organisation met last week. Not that you'd know it. Is the dream of global trade done? Plus, with real wages finally growing, could the RBA really raise rates again?

An uptick in US inflation shows the path back down might not be smooth, plus back home the labour market cools, hyperinflation in Argentina, and is Bitcoin back?

After the new look RBA meeting, the governor now holds a media conference where she addressed the future path of interest rates, as well as Taylor Swift's effect on inflation. Plus, China acts to backstop its sagging equity markets.

Inflation is moderating in Australia and the IMF says the global economy is on "the final descent toward a soft landing". 2024 might be looking up. Plus, what to expect from next week's new look RBA meeting.

We look at the government's changes to the Stage 3 tax cuts. How will this affect the distribution and will they be inflationary? Plus, business confidence plunges and the IMF warns against cutting rates any time soon.

Happy New Year listeners! Big ep to get us rolling: Consumer confidence sliding, signs of slackening in the jobs market and weaker inflation point to the RBA holding in February, Houthi attacks on shipping in the Suez, more weak numbers from China, Mark's apocalyptic beach reading, and the housing market marches on.

It's another bumper quizmas episode. We score Mark on last year's forecasts and gaze into the crystal ball to see what's ahead in 2024. Thank you to all of our listeners. Have a great break! We'll be back in January with more epsiodes.

The RBA will now speak with multiple voices with all board members expected to speak to the public. Will this lead to greater transparency or muddy the waters further? Plus, more bumper jobs growth, the MYEFO reveals another jump in tax receipts, Milei takes his razor to Argentine spending and another COP climate conference goes by.