The Dismal Science

AICD is proud to announce the launch of a brand new podcast offering - Director Download. Director Download is a weekly podcast series that keeps directors and senior leaders ahead of evolving governance obligations. Each episode features conversations with policy experts and leading directors to unpack complex governance challenges and deliver practical insights that can be applied in the boardroom. You can listen by searching 'Director Download' in your podcast player, or by clicking the links below: Listen on Spotify: https://open.spotify.com/show/033f7mHnHstKVIekaBMT2Y Listen on Apple: https://podcasts.apple.com/au/podcast/director-download/id1896576074

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

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.

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

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.

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

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 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

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

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

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.

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.

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.