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February 19 2020

 

1. The spending boom continues… 

ABS data showed January retail sales were +10.7%yoy. And an interesting chart from the ECX result this week showed the rise in used car pricing over the past 13 months off the back of pent up demand…but that’s not all we are buying. According to CommSec data, the number of first time traders more than doubled since February 2020 (18% compared to 8% pre-COVID). The majority of these new CommSec customers (83%) were under 44 years of age – a 17% increase compared with pre-COVID trends.

 

2. How much can we blame on JobKeeper…

JobKeeper is set to end at the end of March. The most vulnerable Australian workers to job loss are those still on zero or relatively few hours for ‘economic reasons’ (e.g. stood down). As at December, there were 237,000 workers in this group which was ~60,000 more than a year earlier. That increase equates to 0.5% of total employment. Also interesting to note that JobSeeker in its current form and insolvent trading relief laws also end in just over a month. Watch this space.

3. Rate watch… 

Interest rates have been a big focus this week as US 10 year and 30 year hit their highest levels since the pandemic started. There is increasing debate about how much stimulus, particularly in the US, will be rolled back in the coming months to stem inflation. But the US jobless claims report showed just how slow the US recovery continues to be, and how important the new Biden stimulus will be. The government reported that applications for jobless benefits rose last week to 861,000, indicating that layoffs remain high as coronavirus shutdowns keep many businesses closed.