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Economy

Updates on the state of the economy, growth, inflation, and employment.

  • Credit: sferrario1968 / Pixabay

    History-blind tariffs drive US towards recession: Oliver

    Credit: sferrario1968 / Pixabay

    The thing that has come upon us is that which we feared most: Based on the take of AMP chief economist Share Oliver, the impact of United States President Donald Trump’s tariffs could be - pardon the euphemism - of biblical proportions. Oliver is referring specifically to Trump’s tariffs announced overnight (Thursday AEDT), which based on his rough calculations, will take the U.S. average tariff rate to above levels seen in the 1930s after the Smoot/Hawley tariffs. Without putting too fine a point on it, the Smoot-Hawley Tariff warrants a brief history lesson. Most economists believe the Smoot-Hawley Act of 1930, which imposed rates as high as 41%, triggered a trade war that collapsed global trade, and helped transform the nascent recession into a decades-long global depression. However, Trump clearly doesn’t see it that way. In a recent speech, he blamed the Great Depression on the U.S. removing tariffs in 1913 and replacing them with an income tax. Like most of his economic peers, Oliver believes the current round of tariffs will by default heighten the risk of a U.S. recession – via a further blow to confidence and supply chain disruptions – and a big hit to global growth. “The risk of a US recession is probab

  • Credit: RitaE / Pixabay

    Trump's beef with Australia amid claims of protectionism

    Credit: RitaE / Pixabay

    The sweeping “Liberation Day” strike by the United States against its global trading partners included a 10% tariff on Australian exports, with President Donald Trump singling out Australia's ban on fresh beef from North America during his announcement. "They're wonderful people and wonderful everything, but they ban American beef," Trump said. "Yet, we imported $3 billion of Australian beef from them just last year alone. They won't take any of our beef. They don't want it because they don't want it to affect their farmers.” It’s understood the U.S. has settled on a 10% reciprocal tariff for Australian exports due to non-tariff trade barriers, including biosecurity restrictions on some American food. Referring specifically to non-tariff trade barriers imposed by a range of countries, Trump noted: “They manipulated their currencies, subsidised their exports, stole our intellectual property, imposed exorbitant VAT [consumption taxes] taxes to disadvantage our products, adopted unfair rules and technical standards and created filthy pollution havens.”US beef banned in 2003Australia has a free trade agreement with the U.S., allowing products to enter each others' countries tariff-free. However, biosecurity restricti

  • Credit: The White House from Washington, DC, Public domain / Wikimedia Commons

    Trump tariffs: US President slaps Australia with 10% tax

    Credit: The White House from Washington, DC, Public domain / Wikimedia Commons

    The Trump administration declared today "Liberation Day" as President Donald Trump rolls out a set of tariffs. Both America's allies and adversaries are likely to experience conflict as a result of the reciprocal tariffs.A brief overview of what you need to know The President of the United States, Donald Trump, unveiled broad new tariffs at the White House today. The president announced large-scale increased levies on goods imported into the United States during the Rose Garden event. This new tariff rollout is referred to by the White House as "Make America Wealthy Again". Donald Trump implemented a "baseline" 10% tariff on imports into the U.S., including Australia. There is a great deal of uncertainty regarding reciprocal tariff agreements - but experts are already warning of potential problems. China, Canada, and Mexico have previously been targeted as well as specific industries, including an auto import duty of 25%. Reciprocal tariffs: Pros v Cons for business and markets------------------------------------------------------------------------------Source: The White House via YouTubeFrom The White House:Tariffs Work — and President Trump’s First Term Proves It Fact Sheet: President Donald J. Trump Declares National Em

  • Credit: Jacob Harris / flickr

    National dwelling approvals dip 0.3% in Feb: ABS

    Credit: Jacob Harris / flickr

    The total number of dwellings approved in Australia declined by 0.3% to 16,606 in February, following a 6.9% increase in January, according to seasonally adjusted data released by the Australian Bureau of Statistics (ABS). Meanwhile, residential building value rose 5.0% to a fresh record of A$9.65 billion. Brock Hermans, ABS head of construction statistics, noted: "Approvals were varied across the building types. Private dwellings excluding houses fell 1.5%, while private sector house approvals were up 1.0%." Most states saw an increase in total dwelling approvals in February, with Tasmania leading at 61.3%, followed by Victoria at 36.4%, Western Australia up 17.1%, Queensland gaining 13.0%, and South Australia adding 5.4%. New South Wales was the only state to record a decline, dropping 44.1%. Approvals for private sector dwellings excluding houses fell 1.5% after reaching a two-year high in January. However, the segment remains 73.1% higher than a year ago. New South Wales saw just 313 new apartment approvals in February, compared with 2,694 in January, which was the highest monthly figure since May 2023. Victoria, on the other hand, saw an increase in apartment approvals, with 2,294 new units approved in Fe

  • Credit: RBA

    Reserve Bank of Australia holds interest rates at 4.1%

    Credit: RBA

    Following the Reserve Bank of Australia's first rate cut in five years, policymakers opted to hold rates steady at 4.1% following their two-day policy meeting on Tuesday, largely in line with market expectations. Board members noted that underlying inflation is easing, aligning with forecasts, however, policymakers remain cautious to ensure inflation returns to target sustainably. The board noted that the outlook remains uncertain, with recovering domestic demand and rising household incomes offset by weak business pricing power. Labour market conditions also remain tight, with labour shortages persisting despite easing wage pressures and high unit labour cost growth. The board noted continued concerns regarding the international outlook, as recent tariff announcements from the United States dampen global confidence, with potential spillover effects if trade tensions escalate further. Inflation, however, “could move in either direction”, as many central banks worldwide have eased monetary policy, and are now becoming “increasingly attentive to evolving risks from global policy developments”. Officials are assessing the current policy settings as “restrictive” and reiterated their determination to “sustainably ret

  • White House aid Peter Navarro. Credit: Wikicommons

    Trump's tariffs to bring in US$6tn in 10yrs: Navarro

    White House aid Peter Navarro. Credit: Wikicommons

    White House aide Peter Navarro said reciprocal tariffs to be announced tomorrow will generate US$6 trillion over the next decade, with another US$1 trillion from automotive levies. Navarro, the Trump administration's senior counselor for trade and manufacturing, says the non-auto tariffs alone are set to bring in ~US$600 billion annually over the next decade, yet it is unclear how the money will actually be generated. The world is waiting with bated breath for the release of Trump's reciprocal tariffs on April 2 - what he calls ‘Liberation Day’ - and the global animosity around the upcoming announcement has caused market volatility across a wide range of sectors.Market bloodbathA sea of red hit global markets on Monday, with the Nasdaq continuing a fall from its worst week in three years. The S&P 500 fell back into correction territory before bouncing off a 6-month low. Tokyo markets were the worst hit, falling 4%. The volatility index, the VIX - a frequent indicator of the market's expectation of volatility - continued its impressive run with a rise of >30% over the last five trading days. Find more: Decoding the 'fear gauge': Volatility and the VIX Meanwhile, Goldman Sachs slashed its S&P 500 forecast for a sec

  • Credit: cottonbro studio / Pexels

    Australia's labour productivity still declining: report

    Credit: cottonbro studio / Pexels

    Australia’s labour productivity continued to gradually decline last quarter, according to a report by the Productivity Commission. Productivity fell by 0.1% in the December quarter, and by 1.2% across 2024. Both output and the number of hours worked grew, rising by 0.6% and 0.7% last quarter. “The pandemic and the policy response to it drove a sharp rise — and then a crash — in measured productivity. Now that the dust has settled, we're back to the stagnant productivity we saw in the period between 2015 to 2019 leading up to the pandemic,” said Productivity Commission deputy chair Alex Robson. “The real issue is that Australia's labour productivity has not significantly improved in over 10 years. With global policy uncertainty again on the rise, addressing productivity directly via targeted reforms will be the best way to sustainably boost Australians’ living standards.” Output rose by 1.3% in 2024, below 2023’s output of 1.5%. Hours worked increased by 2.5% last year, outpacing 2023’s 1.5% growth. Agriculture, forestry, and fishing saw the largest year-over-year boost in labour productivity last quarter at 4%. Rental, hiring, and real estate, along with ‘other services’, posted the biggest declines at 2.6% and 3.6%

  • Credit: Vilius Kukanauskas / Pixabay

    Dutton's Energy plan waste of taxpayers' money: Forrest

    Credit: Vilius Kukanauskas / Pixabay

    The Coalition’s plan to spend $1 billion building gas pipelines to bring new supplies to NSW and Victoria – which could experience shortfalls by 2028 – has met with instant derision. In an attempt to lower east coast energy bills, Coalition leader Peter Dutton announced plans to divert gas that would have been exported offshore into Australia’s energy grid. | Dutton’s dual pitch to lower energy prices and boost supply includes immediately introducing an “east coast gas reservation” that would secure an additional 10 to 20% of NSW and Victoria’s gas needs. “Gas sold on the domestic market will be decoupled from overseas markets to protect Australia from international price shocks,” Dutton told Parliament in his much-anticipated Budget reply speech. “And this will drive down new wholesale domestic gas prices from over $14 per gigajoule to under $10 per gigajoule. Dutton’s energy pitch also includes a “fit-for-purpose gas trigger to safeguard supply,” “Use it or lose it” rule to ensure offshore gas fields are not banked to reduce competition, and a commitment to audit development-ready projects that boost supply in Australia’s southern states. “This plan will prioritise domestic gas supply, address shortfalls, and re

  • Credit: The White House / Flickr, Wikimedia Commons

    Trump: US to impose 25% tariff on foreign-built cars

    Credit: The White House / Flickr, Wikimedia Commons

    The United States will impose a tariff of 25% on cars built outside the country, President Donald Trump said today, with major tariffs on a wide range of nations and goods set to begin in early April. Trump said the vehicle tariffs are intended to be permanent, with the goal of urging automakers overseas to add factories in the U.S. “What we’re going to be doing is a 25% tariff for all cars that are not made in the United States,” Trump said. “We start off with a 2.5% base, which is what we’re at, and go to 25%.” “If you build your car in the United States, there will be no tariff,” he said. These tariffs will apply to all completed cars and trucks shipped to the U.S., including American brands with factories overseas. Tariff revenue on vehicles will be collected from 3 April, Trump said. General Motors, Ford, and Stellantis’ share prices all declined by around 5% in extended trading. The European Commission criticised the vehicle tariff plans, with President Ursula von den Leyen saying, “As I have said before, tariffs are taxes — bad for businesses, worse for consumers equally in the U.S. and the European Union.” Automakers are also facing 25% tariffs on steel and aluminium imported into the U.S., which Trump

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