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The Economy

Currencies

Floodgates tested as global factors push Australian dollar below US90c

Mark Mulligan 4:56pm The Australian dollar broke below US90¢ for the first time in six months on Monday afternoon, as global factors kept the currency under pressure.

Eco

Australia's house prices second-highest in world: BIS

According to the BIS's latest quarterly review of global housing, Australia was the second most expensive market.

Mark Mulligan 11:09am Australian house prices are among the world's most expensive when measured against incomes and rents, according to the Bank for International Settlements (BIS). But it also found real price growth in the country was flat once adjusted for long-term trends.

Workers can forget about big pay rises for some time to come

Clancy Yeates dinkus Dinkus

CLANCY YEATES 12:15pm When it comes to pay rises, it is a sorry state of affairs confronting many wage-earners at the moment.

Comments 175

Eco

Australia's high house prices not a 'crisis', says RBA

Booming: The median Australian house price has soared almost 11 per cent in the past year.

The Reserve Bank says there is no cause for panic as Australia's house prices reach dizzying heights.

Economy

Unemployment drops to 6.1 per cent

The figures, which were better than expectations, follow a surprise spike in July to 6.4 per cent from 6 per cent in July.

Mark Mulligan and Misa Han Australia's unemployment rate dropped to 6.1 per cent in August, after the labour market added a net 121,000 jobs.

Tech

TPG gets green light to connect fibre to basement in apartments

NBN Co. has argued that TPG’s plan to connect homes and businesses with fibre to the basement internet services could hurt its business case.

David Ramli TPG Telecom will be allowed by the competition regulator to keep connecting urban apartments to its high speed broadband network despite NBN Co’s claim it could lead to its business case collapsing and the potential it could add billions of dollars in expenses to the Budget.

Slight improvement expected in jobs data

Concerns about jobs are weighing on consumers' spending decisions and long-term outlook, according to the latest Westpac-Melbourne Institute consumer sentiment index.

Mark Mulligan Australia's unemployment rate is widely expected to have eased slightly in August after a surprise spike to 6.4 per cent in July, with consensus forecasts putting the Australian Bureau of Statistics' latest reading at 6.3 per cent.

Interest rates

NZ Reserve Bank keeps rates unchanged

'The high exchange rate continues to restrain growth,

Bianca Hartge-Hazelman The Reserve Bank of New Zealand has decided to take a breather from raising rates as it copes with the fallout from its uncomfortably strong dollar.

Economy

Why country kids are born CEOs

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Patrick Durkin Country kids are punching well above their weight in the big city.

Coca-Cola Amatil slashes wages with new employees to work for less

Coca-Cola Amatil sealed a new pay deal this week with its Victorian warehouse workers.

Rose Powell and Sue Mitchell Coke has slashed worker wages, another step in a national trend that will hit consumer sentiment, house prices and GDP.

Logistics

Logistics group Qube warns of rising Melbourne cargo charges, import prices

Jenny Wiggins Melbourne cargo charges could double over the next two years, raising prices of imported goods for consumers, as the privatisation of Australian container ports pushes up rents, logistics group Qube has warned.

Eco

Consumer sentiment slumps as budget worries weigh

The index reading of 94.0 was down 15.1 percent on the same month last year, with pessimists exceeding optimists.

A measure of Australian consumer sentiment suffered a sharp reversal in September as households became more concerned about the outlook for the economy and employment.

Property

Fancy a million-dollar parking spot?

The site in SoHo, where the apartment complex with the $US1 million car spots is being built.

Michelle Higgins At $US250,000 ($271,471) a tyre, these parking spaces in Manhattan cost more than four times the median home price in the US.

Economy

Business confidence sags in August

The transport industry has joined miners in downgrading its outlook for business conditions.

Mark Mulligan Business confidence sagged in August, wiping out July's improvement, as wholesalers, the transport industry and utilities joined mining companies in downgrading their outlook for trading conditions after painting a brighter picture the month before. However, business confidence and conditions remained resilient over the longer run, with both much stronger than a year ago.

Lending

Investors still driving new housing loans

Growth in new home loans is being fuelled by investors.

Mark Mulligan Property investors are not far off snapping up the majority share of Australia's new home loans, taking out a record proportion of Australia's new housing finance in July.

Eco

Job ads up despite shock July jobless rate

Job ads rose 1.5 per cent in August and are up eight per cent over the year to date.

Stephen Cauchi Rising job ad numbers suggest the labour market is improving, despite the shock jump in July's unemployment rate.

Economy

Why GDP doesn't tell the full story

Much of the benefit of the third phase of the current export boom will be felt overseas, says Saul Eslake.

MAX MASON The resources boom helped Australia avoid recession during the global financial crisis, but the ripple on effect has created a two-speed economy where traditional measures of growth no longer give the full story.

Economy

Ross Garnaut urges Reserve Bank to end its housing market fixation and drop interest rates

Ross Garnaut appeals for lower interest rates.

Gareth Hutchens and Clancy Yeates One of Australia’s preeminent economists has warned the “whole economy” needs lower interest rates but the Reserve Bank’s concern with the housing market is preventing that happening.

Eco

Super changes to hurt low income earners the most: expert

“It is a very disappointing decision for all Australians that will disproprotionately disadvantage lower income earners,” HOSTPLUS chief investment officer Sam Sicilia said.

SALLY ROSE The chief investment officer of one of Australia’s largest and fastest growing superannuation funds, HOSTPLUS, has added his voice to the chorus of disappointment at this week’s Senate deal to push out the hike in compulsory super contributions from 9 per cent to 12 per cent till 2025.

Economy

Consumer spending up in July, but pace slows

Spending in department stores rose 1.9 per cent in July.

Mark Mulligan Consumer spending continued to pick up in July, but at a slower pace than in June, according to figures out on Thursday.

Eco

Australia Post pushes for 'urgent reform'

Australia Post managing director Ahmed Fahour said the changes meant the business represents a shift from

ALANA SCHETZER Australians are set to be forced to pay more for 'regular' mail delivery as Australia Post pushes forward with its proposed shake-up of its dwindling letters service.

Eco

Letters deliver profit slump for Australia Post

Losses from the letter-delivery business blew out to $328.4 million for the full year.

ROSE POWELL Australia Post announced a sharp slump in profit on Thursday morning, and added a dire warning about the future of the government-owned business.

RBA chief warns on booming property market

RBA chief Glenn Stevens.

CLANCY YEATES Reserve Bank governor Glenn Stevens has delivered a blunt warning on the booming property market, highlighting the dangers of pumping up house prices from "already elevated" levels.

Innovation

Tech sector calls on government to improve startup funding

Startups such as rapidly growing design software Canva have received Commercialisation Ai funding.

ROSE POWELL The technology industry has called on the government to change several rules in an incoming startup grant program to address market failures holding new tech companies back.

Housing

RBA governor Glenn Stevens warns of housing bubble risk

Aware that

Mark Mulligan Reserve Bank of Australia governor Glenn Stevens has warned about the creation of asset bubbles in the current low interest rate environment.

Interest rates

Rates are on hold - but for how much longer?

At the monthly board meeting on Tuesday, the RBA kept the cash rate at 2.5 per cent for the 12th consecutive meeting, marking the longest period of steady rates since 2006.

MISA HAN The Reserve Bank of Australia is on track to break its record for the longest spell of cash rate inertia, with most major economists forecasting the central bank will sit on its hands well into 2015.

Economy

RBA governor Glenn Stevens calls for more business investment

Mark Mulligan Reserve Bank of Australia governor Glenn Stevens has called on business to invest more to speed up the transition away from resources-based growth.

Economy

What the GDP figure for June really means

GDP

GARETH HUTCHENS GDP is a backward looking economic indicator.

Tourism

Tourist spending jumps to record $30.1b in Australia

A record 6.1 million international visitors came to Australia last year, up 8 per cent from the prior year.

Jamie Freed Spending by international visitors to Australia rose to a record $30.1 billion in the financial year ended June 30, up 7 per cent from the prior year due to a strong rise in the number of holidaymakers from several key markets.

Eco

Red tape holding back Australia: WEF

JARED LYNCH Red tape and a "rigid" labour force are hammering Australia's global competitiveness, according to the World Economic Forum.

GDP

Economic growth slows to 0.5 per cent in June quarter

A big fall in exports cut growth in the June quarter

Mark Mulligan The Australian economy grew a mere 0.5 per cent in the June quarter as a steep fall in export values and weak capital expenditure crimped national output.

Real estate

House price boom must end, says David Gonski

“The fact is, anyone who believes prices always go up is, I think, a fool.”

GEORGIA WILKINS ANZ chairman David Gonski has warned Australia’s booming housing prices cannot go on forever and the market will eventually experience a correction.

Economy

RBA holds rates pointing to jobs, Chinese property

RBA governor Glenn Stevens.

Mark Mulligan The Reserve Bank of Australia on Tuesday kept interest rates on hold at 2.5 per cent, as it again noted slack in the job market and rising house prices, while introducing concerns about the Chinese property market.

Current account deficit widens in June quarter

Exports fell 7 per cent in the June quarter.

Mark Mulligan Australia’s current account deficit widened out to $13.7 billion in the June quarter, from $7.8 billion at the end of March, as exports of goods and services fell 7 per cent and imports rose 1 per cent.

Property

First-home buying hits four-year low

Housing

JENS MEYER First-home buying has plunged to a four-year low, according to mortgage broker AFG.

Economy

RBA will be eyeing global weakness with cash rate decision

RBA governor Glenn Stevens.

Mark Mulligan The RBA statement accompanying Tuesday's interest rate decision is likely to focus on global conditions, the slow rate of non-mining investment and perhaps the strength of the Australian dollar.

Economy

Critical September in store for shares

September has traditionally not been a kind month for stocks.

VESNA POLJAK September is historically no friend of investors but experts are wondering if the first positive June quarter since 2009 could pave the way for a welcome break from tradition or play into the hands of Wall Street’s most vexed month.

Results

Company gross profits down 6.9 per cent in Q2

Company gross operating profits fell 6.9 per cent in the June quarter, official figures show.

Economy

TD Securities-Melbourne Institute inflation gauge at seven-month low

Petrol prices helped ease inflation in August.

A private gauge of Australian price pressures showed consumer price inflation at its lowest in seven months in August, a welcome sign of moderation after higher readings in the second quarter.

Eco

Manufacturing index softens in August

Across the whole PMI, production, new orders, sales, employment and supplies were all below 50, indicating contraction at all levels of manufacturing.

Mark Mulligan Manufacturing conditions worsened slightly in August compared with July, according to the latest Australian Industry Group (AiG) Performance of Manufacturing Index (PMI).

Focus on weak GDP growth, high dollar

Centrelink sign

Mark Mulligan A welter of economic data will point to whether or not the re-balancing of the Australian economy has gathered momentum.

Currencies

Broken $A shock absorber giving growth a bumpy ride

Australian dollar

MISA HAN The Australian dollar’s persistent strength in the face of falling commodity prices and a declining gap between local and overseas bond interest rates is dragging on the country’s economic growth, analysts say.

Business investing in the economy we don't talk about

Michael Pascoe dinkus

MICHAEL PASCOE It sometimes seems capital investment commentary in Australia concentrates on mining and manufacturing, perhaps because they are industries with unhappy outlooks and bad news is good news.

Unexpected capital expenditure jump defies experts' predictions

Stephen Cauchi New private capital expenditure has rebounded in the June quarter, rising 1.1 per cent and defying economists' expectations of a decline.

Housing

New home sales fall in July

Sales of flats, townhouses and semi-detached houses were down 10.9 per cent last month.

The housing market has suffered a setback to the start of the financial year after enjoying a strong recovery in 2013/14.

Tech

NBN Co received $8.4b in government funding, looking to double user numbers

NBN Co has spent $2.5 billion in capital expenditure during financial year 2014 on top of $1.1 billion in operational expenditure.

David Ramli ‎NBN Co says it has received $8.4 billion in government funding and will double the number of customers using the national broadband network over the next 12 months to hit 480,000 users.

Eco

Capex data points to in-line GDP growth

Seasonally-adjusted total new capital expenditure end-June was ahead 1.1 per cent.

Mark Mulligan Business investment was stronger than expected in the June quarter, giving weight to Reserve Bank of Australia assumptions for second-quarter gross domestic product growth of 0.4 per cent.

Housing

Australia's housing bubble is real and banks are to blame, says author

housing

Jonathan Shapiro Lindsay David may sound crazy ­comparing Australia’s banks to Lehman Brothers and Bernie Madoff.

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Agribusiness

More dairy mergers coming, says Murray Goulburn boss

JARED LYNCH The boss of Australia's biggest dairy company is forecasting more consolidation in the sector, saying there "isn't enough money to be made" for all players.

Eco

Value of construction activity contracts in quarter

The ABS said the value of completed construction in Australia is down  1.5 per cent over the year.

Mark Mulligan The estimated value of completed construction in Australia contracted in the June quarter, in the latest sign of the slow pace of economic re-balancing away from mining infrastructure in Australia.

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