Economic Update – Productivity in Focus

It was no surprise to me that the RBA chose to raise interest rates this month after pausing in May due to the unfolding banking crisis in the US. Somehow the Economist’s seemed to get it wrong but let’s face it, headline inflation may be receding, but it is still elevated in Australia and around the world. On top of that, labour markets remain stubbornly tight due to labour hoarding which is feeding into poor productivity.  Shortly we will have another US Federal Reserve decision and while most are predicting (or is that hoping for) a rate pause. Meanwhile, there has been yet another investment market boom, this time it’s all about Artificial Intelligence (AI) sparked by the ChatGPT phenomenon.

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