economists

Your editor writes from home this morning, as we pre-recorded a radio interview for ABC Coast FM early this morning [that's 91.7 on your dial for those in the Gold Coast area].

The show was due to be aired later on this morning.

They were interested in your editor’s views on government subsidies. It won’t surprise you to learn that we weren’t short of things to say. The main subject on the agenda was Queensland’s scrapping of the 8-cent per litre fuel subsidy.

Who benefited from it? Who would lose out from its removal? And were there any circumstances where subsidies were good? There was also a question about the first home-buyers bribe as well.

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We printed the following chart in Money Morning last week. Or a version of it anyway. At that time of course, we only had the interest rate data for that week and the week prior.

It showed the increase in interest rates right across the yield curve. All the way from the 3-month bond through to those that mature in fifteen years time.

Well, one week later and, you’ve got it, interest rates have moved higher. I was going to write that they’d ‘crept’ higher, but they haven’t. It’s been a pretty hefty rise, especially towards the longer dated bonds.

Take a look at the chart for yourself…

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Yesterday the unemployment rate dropped. Cause for cheer? No, according to the expert economists.

Westpac senior economist Anthony Thompson told News Ltd it was just “statistical noise” and that “smoothing through the noise you’ll see the labour market has not turned… every other lead indicator is pointing to a decline well into 2010.”

Oh dear.

The latest number from the Australian Bureau of Statistics (ABS) puts the ’seasonally adjusted’ rate at 5.4%, down from 5.7% in March. And the ‘trend’ rate is at 5.5%, which is up from 5.4% in March.

As you can see from the ABS chart below, one is point UP, the other is pointing DOWN…

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Your editor is back. Kind of. We still haven’t been able to muster the stamina to make it in to the Old Hat Factory, so we’ll write from a drizzly Frankston today and tomorrow.

As we take back the reins from the Daily Reckoning’s Dan Denning, something struck us. In fact it struck us so hard we had trouble sleeping last night. Whether it was the thought I’m about to share with you or the throat, head and aching limbs I can’t be 100% certain, but think about this…

Whichever way you want to look at it there is almost universal acceptance that Australia is in a recession. We’ll let the economists and commentators argue over the definition of a recession. And whether it is a ‘real recession’ or a ‘technical recession.’

All your editor knows is that if an economy grows in one month then it has grown. Therefore if it shrinks in one month then it has shrunk.

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