Three months of the carbon tax and guess what?
Tomorrow, the carbon tax will have been in place for three months and, guess what? Things are pretty good. Here are a few facts and observations.
- The ASX200 has risen 7.1% over that time, adding around $80 billion to the market capitalisation of the index.
- House prices have risen by 2.0%, adding a further $80 billion to the value of private sector houses.
- Australia has retained its triple-A credit rating from all three rating agencies.
- The unemployment rate is 5.1% down from 5.3% in June.
- Foreign investment flows into Australia have been so strong, that the Australian dollar is up 1.9%.
- 10 year government bonds yields are 5 basis points lower over the three months which again reflects investor confidence in Australia and an ongoing low inflation environment.
- The Reserve Bank of Australia held interest rates steady at near record lows of 3.5% in July, August and September, although the market is pricing in more interest rate cuts in the months ahead.
- There has been a smattering of monthly economic data, most of it consistent with on-going steady economic growth in the September quarter.
- Retail sales have eased off after a spike in May and June.
- Consumer sentiment has risen 2.7% in the three months since June.
- The TD-MI inflation gauges has risen by 0.8% in the last two months, a rate consistent with the overall 0.7% impact on prices from the carbon tax.
- According to the NAB survey, both business conditions and business confidence have improved marginally.
- There is some negative news – the ANZ job ads series has trended lower in the last few months, and housing credit growth has slowed to a record low as consumers it appears, continue to pay off debt at a rapid pace.
Overall, it looks like the economy and financial markets have continued to roll along at a nice healthy pace even with carbon now having a price.