Category Archives: Inflation

US adds 272,000 jobs as labor market holds unexpectedly strong amid high interest rates

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Figures show unexpected resiliency of job market as officials try to tamp down 3.4% inflation

The US economy added 272,000 jobs in May, a sign the labor market continued strong amid high interest rates, the Bureau of Labor Statistics announced on Friday.

The number of May jobs was far higher than the 190,000 economists had expected and topped April’s gains, when a revised 165,000 jobs were added to the economy. The unemployment rate rose to 4% for the first time since January 2022, up from 3.9% in April.

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Falling UK inflation not leading to rise in spending, report finds

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May recorded the lowest spending growth since February 2021, Barclays’ snapshot of card activity shows

Consumer spending growth is at its weakest in more than three years as higher council tax bills and the rising cost of broadband and mobile phones eat into household budgets, a report has said.

The monthly snapshot of credit and debit card activity from Barclays found an improvement in consumer confidence as a result of falling inflation was not leading to a pickup in spending.

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Former ADF chief to report on Zomi Frankcom’s Gaza aid convoy death in ‘coming weeks’ – as it happened

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Wage increase should be more than inflation so workers get real pay rise: McManus

Sally McManus says workers are still coming from behind:

I won’t be too happy if it’s 3.5%. That’s smack on inflation. I think it should be more than inflation.

People should see a real wage increase.

One of the things that, you know, some people argue is … this weird wage price spiral idea which has been well and truly debunked over the last few years.

Just because one group of workers get a pay rise, like, the lowest paid … that’s not going to automatically flow on to everyone else.

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Decline of the pre-work coffee: why more Australians are skipping their weekday cafe breakfasts

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Employees are working from home or packing their own lunches when they go to the office – but they’re still spending on weekend brunches

More Australians are skipping their pre-work takeaway coffee and breakfast roll so they can splurge on a meal on the weekend, as the rise of hybrid work and high living costs upend spending habits.

Transactions data from digital payments platform Square shows the number of purchases at food and drink businesses between 7am and 11am on weekdays has dropped to below pre-pandemic levels, led by falls in Melbourne, Sydney and Brisbane.

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MP urges colleagues not to use Gaza as ‘opportunity to gain votes’ – as it happened

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WA shooter’s daughter says police ‘ignored’ warnings

Social services minister Amanda Rishworth has been asked about the powerful statement Ariel Bombara released yesterday, claiming Western Australian police had “ignored” warnings from her and her mother that their lives were under threat.

By that point we felt completely helpless and I had to focus on getting mum to safety. I did everything I could to protect my mother, and when my father couldn’t find us he murdered her best friend and her best friend’s daughter.

Rents have surged in Australia’s capital cities, with only 5.9% of city overall rentals now costing less than $400 a week.

At the start of the pandemic, one in five house rentals in Sydney cost less than $400 a week – that figure is now one in 50.

In Melbourne, one in 25 house rentals now costs less than $400.

The national share of rentals available under $400 dropped by one third annually to just 10.4%.

ACT had the smallest share of properties listed to rent under $400 at 2.1%, followed by Sydney (3.8%) and Perth (5.6%).

Melbourne saw the largest annual decline in the share of houses listed for less than $400 a week, followed by Adelaide and Sydney.

In regional markets, only 16.3% per cent of houses were advertised for under $400 a week in April.

Regional WA (14.8%) had the smallest portion of homes listed to rent below $400 of the regions, followed by regional Queensland (15.8%) and regional NSW (21.5%).

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Majority of Americans wrongly believe US is in recession – and most blame Biden

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Exclusive Harris poll for the Guardian shows 55% believe economy is shrinking, in troubling sign for president’s re-election bid

Nearly three in five Americans wrongly believe the US is in an economic recession, and the majority blame the Biden administration, according to a Harris poll conducted exclusively for the Guardian. The survey found persistent pessimism about the economy as election day draws closer.

The poll highlighted many misconceptions people have about the economy, including:

55% believe the economy is shrinking, and 56% think the US is experiencing a recession, though the broadest measure of the economy, gross domestic product (GDP), has been growing.

49% believe the S&P 500 stock market index is down for the year, though the index went up about 24% in 2023 and is up more than 12% this year.

49% believe that unemployment is at a 50-year high, though the unemployment rate has been under 4%, a near 50-year low.

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Big drop in UK inflation rate disguises more disappointing details

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Service sector inflation, monitored closely by Bank of England, barely budged in April

The annual inflation rate fell sharply in April. Prices are rising more slowly than at any time in almost three years. Inflation is lower in the UK than it is in the EU.

Even so, the latest bulletin on the cost of living from the Office for National Statistics was mildly disappointing. April’s inflation figure was always going to be good, with a sharp fall guaranteed by the fact the energy price increases of a year earlier were not repeated.

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UK inflation falls by less than expected to 2.3%, reducing chance of June rate cut

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Drop in April is smaller than forecast but level is still lowest in almost three years

UK inflation fell to 2.3% in April – its lowest level for almost three years – but the decline was smaller than expected, denting hopes of an early interest rate cut.

City analysts had forecast the annual increase in the cost of goods and services would fall to 2.1%, close to the Bank of England’s 2% target.

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Guardian Essential poll: $300 energy rebate shouldn’t go to high-income households, voters say

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Poll finds lukewarm response to Labor’s 2024 budget, with only 27% of people thinking it will make a ‘meaningful difference’ to the cost of living

A majority of voters approve of the main measures in Labor’s third budget, although three in five think the Albanese government’s $300 electricity bill rebate should have been better targeted.

Those are the results of the latest Guardian Essential poll of 1,149 voters, which found a lukewarm reaction to the budget overall, with just over a quarter (27%) saying it would make a “meaningful difference” to their cost of living.

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Jim Chalmers labels Peter Dutton’s budget reply an ‘unhinged’ and ‘nasty’ rant

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Opposition leader promised in speech on Thursday to restrict property investment by non-residents

The treasurer, Jim Chalmers, has criticised the opposition leader Peter Dutton’s budget reply speech as “unhinged” and lacking in economic credibility, as he set out around Australia to explain the government’s own economic plan.

With parliament now in recess for a week, Chalmers headed to Port Augusta in South Australia with the environment minister, Tanya Plibersek, and SA state and federal colleagues to promote the government’s renewable energy transition agenda, badged as Future Made in Australia.

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Australia politics live: Speaker urges no political fundraising in parliament as Coalition MPs sell tickets to Dutton budget reply events

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‘We don’t think production tax credits is way to go’: Angus Taylor on Future Made in Australia

Is the Coalition going to vote against the Future Made in Australia policy, which was fleshed out in the budget and includes tax credits (in 2028) for things like critical minerals mining and green hydrogen?

We haven’t seen the act. We don’t think production tax credits is the way to go in order to have a strong manufacturing sector.

It’s about getting those fundamentals right whether it be approvals, whether it be getting rid of red tape or making sure the construction costs are competitive with the rest of the world.

Oh, but it’s also a drop in the ocean, you know. What are we saying? It’s a Band-Aid on a bullet wound compared to the pain that mum and dads in Australia are actually feeling.

I can tell you, they’ve paid a lot more than $300 under Mr. Albanese for their electricity. For the life of me, though, what it does show is Mr Albanese, [and the government] they’ve got their priorities all wrong.

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NHS spending rise lags behind Tory funding pledges, IFS finds

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Thinktank says extra funding eaten up by higher inflation despite greater demand with service in poor state of repair

Spending on the NHS in England has risen less quickly than the Conservatives promised at the last election despite the extra demand created by the pandemic and record waiting lists, a leading thinktank has said.

The Institute for Fiscal Studies (IFS) said increases in funding from the government had been eaten up by higher than expected inflation and, as a result, NHS day-to-day spending had grown by 2.7% a year during the current parliament – below the 3.3% pledged by Boris Johnson in 2019.

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Jacob Rees-Mogg accuses Bank of England of ‘miserable incompetence’ over inflation

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MP criticises policies on interest rates and bond-selling as Tory rightwingers call for review of Bank’s independence

Jacob Rees-Mogg has accused the Bank of England of “miserable incompetence” over its failure to reduce inflation more quickly and its bond-selling strategy, as rightwing Tories prepare to renew their attacks on the Bank’s independence.

The former business secretary accused the Bank of damaging the economy with its interest rate decisions and costing the taxpayer tens of billions of pounds by selling off government debt too quickly in an attempt to reduce its balance sheet – a policy known as quantitative tightening (QT).

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Jim Chalmers flags cost of living help for job seekers in federal budget

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‘There is more than one way to help people who are on income support,’ treasurer says when suggesting rebates and concessions could be boosted

The federal government is poised to expand rebates and concessions available to job seekers in next week’s federal budget, which is also expected to increase rent assistance.

The treasurer, Jim Chalmers, has confirmed that Tuesday’s budget will not increase the jobseeker payment but suggested it would boost concessions linked to social security payments, among a suite of measures designed to offer cost-of-living relief without pushing up inflation.

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Bank of England keeps interest rates at 5.25% but hints at a June cut

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Policymakers say they want to see more evidence that price pressures are easing before cutting rates

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The Bank of England has signalled it could start cutting interest rates as early as June after inflation was found to be “moving in the right direction”, as it kept borrowing costs on hold at 5.25% for the sixth time in a row.

Alongside the decision to keep rates on hold, the Bank said inflation was already on course to hit its target of 2% and would fall to just 1.6% in two years, opening the door to future cuts in interests.

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Germans grill Olaf Scholz over soaring cost of doner kebabs

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Die Linke party is among those calling for a Dönerpreisbremse or price cap on the hugely popular street food

The soaring cost of doner kebabs has led to growing calls in Germany for a government subsidy programme to keep the inflation-hit dish, one of the country’s favourites, affordable as politicians report it is frequently cited as a concern in doorstep conversations with voters.

The chancellor, Olaf Scholz, has become so used to being asked about the price of kebabs during public appearances that his government has even posted on social media to explain that price rises are in part due to rising wage and energy costs. “It’s quite striking that everywhere I go, mainly from young people, I’m asked whether there shouldn’t be a price brake for the doner,” Scholz has said.

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Thames Water collapse could trigger Truss-style borrowing crisis, Whitehall officials fear

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Exclusive: Concerns over effect on UK’s finances lead officials to believe utility should be renationalised before general election

Senior Whitehall officials fear Thames Water’s financial collapse could trigger a rise in government borrowing costs not seen since the chaos of the Liz Truss mini-budget, the Guardian can reveal.

Such is their concern about the impact on wider borrowing costs for the UK, even beyond utilities and infrastructure, that they believe Thames should be renationalised before the general election.

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Oil price could exceed $100 a barrel if Middle East conflict worsens, World Bank warns

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Increase in cost of crude could drive inflation up and force central banks to keep interest rates high

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A serious escalation of tensions in the Middle East would push the price of oil above $100 (£80) a barrel and reverse the recent downward trend in global inflation, the World Bank has said.

The Washington-based institution said the recent fall in commodity prices had been levelling off even before the recent missile strikes by Iran and Israel – making interest rate decisions for central banks tougher.

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Australia’s inflation rate slows less than expected to 3.6%, dimming hopes of interest rate relief

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Economists had tipped CPI growth for the March quarter of 0.8%, and an annual inflation rate of 3.5%

Australia’s inflation rate slowed less than expected in the March quarter, dimming hopes the cost of living crunch was easing and chances of a 2024 cut in official interest rates.

The consumer price index for the first three months of 2024 was 3.6%, slowing from the 4.1% annual pace in the December quarter, the Australian Bureau of Statistics said on Wednesday. Economists had tipped CPI would drop to 3.5%.

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Most difficult global outlook since 1930s heralds end of US-led world order | Larry Elliott

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IMF has revised up growth forecasts but medium-term prospects remain poor as globalisation goes into reverse

The 2020s are almost halfway over and are on course to be the most difficult decade for the global economy since the 1930s. Every finance minister and central bank governor at the spring meeting of the International Monetary Fund in Washington last week knows that, even if they were not prepared to admit it publicly.

The IMF likes to look on the bright side. It revised up slightly its forecast for global growth and now thinks scarring from the coronavirus pandemic and the cost of living crisis will be less severe than it originally feared. Interest rates have risen without triggering the recessions that were predicted. A soft landing has been finessed. The performance of some countries – the US and India to take two examples – has been strong.

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