Economic cycles have four phases: expansion, peak, contraction, and trough. Our economy is always moving through these phases. The Reserve Bank uses particular markers like unemployment rates, spending, and profit margins to identify where we sit at any given time.
The most recent data is showing our economy to be at the late stages of the contraction phase, when “growth slows, employment falls, and prices stagnate.” (Investopedia.com)
Unemployment numbers have been somewhat skewed by record migration over the past year, but they are on the rise. Big companies are publishing poor results as well, such as the Warehouse with a loss of a whopping $24 million in 2023.
These markers signal the Reserve Bank that they have done all they can to stop inflation, and that things are following the predicted path. We can now expect lower rates and a bit more stability in the coming months.
