The RBA has lifted the cash rate today by another .25%, the sixth time in eight months.
Australia must be getting back to “normal” levels now or very soon, but even if they’re not ‘normal’ the RBA has confirmed “for most borrowers will be around average levels”.
The rise will undoubtedly start to squeeze many of those that have bought their first house in recent years and with the average price of a house in Melbourne now well and truly above$500,000 – be prepared for retail spending to drop later this year and into 2011.
Coupled with a drop in retail spending comes a drop off in casual employment. And when you consider that according to the Australian Bureau of Statistics 1 in 5 Australian’s are employed casually paying monthly bills and debts such as house and car repayments could get very interesting indeed – never mind putting money away for retirement.
The key industries where casual employment dominate in Australia:
– Accommodation and food services 58%
– Retail trade 35%
– Arts and recreation services 32%
There should be some comfort in knowing that just 6% of employees in the financial and mining industry work without entitlements – indicating a higher level of part-time and full-time employment.
This certainly isn’t a tipping point, but it’s worth reading this article by Karen Maley for what might be coming down the economic line in 2012.