November 23, 2025 • 11 mins
This week: the new and improved monthly CPI figure lands. Plus, private sector capex and more.
Michael Thompson is joined by economist Stephen Koukoulas.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Welcome to Fear and Greed Q and A where we
ask and answer questions about business, investing, economics, politics and more.
I'm Michael Thompson and every Monday morning we are joined
by economist Stephen Coucoulis to look at the week ahead.
You'll find him at the kook dot com that is
thg kouk dot com and on X using the handle
of the Kirk Stephen.
Speaker 2 (00:24):
Good morning, top of the morning to you, Michael.
Speaker 1 (00:26):
We have got so much to talk about about what's
coming up this week, but before we do that, we
need to put a few things to bed from last
week wages data. We talked last Monday about how important
it was. What did you make of the figures?
Speaker 2 (00:40):
Yeah, Well, the headline figure, the zero point eight percent
increase in the wage pricing next for the September quarter
three point four percent in annual terms, spot on expectations.
So in a sense it went through to the keeper
and it was not really that sort of market moving thing. However,
there were a few little snippets of information that were
(01:02):
interesting in that some of the resilience was in public
sector wages growth and the private sector wages growth the
one that's more sensitive to interest rate settings actually slowed
to three point two percent, its lowest in three and
a half years.
Speaker 1 (01:17):
Okay, the other big thing last week was the release
of the minutes of the Reserve Bank Board meeting that
had happened two weeks prior and really show that the
central Bank's got no plans to cut rates unless inflation
data improves, right, So it it really feels like the
(01:38):
there's nothing going to be happening in the near future.
Speaker 2 (01:40):
And it's interesting you spot on. That's that's the first thing.
And the second thing is that we do know that
when the RBA pauses and they pause for a long
period of time, if we look back at history when
they've done a few cuts or done a few hikes,
and you know, they decide to look, well, just wait
and see what happens. There are many examples where it's
been a year sometimes more between interest rate moves. So
(02:03):
it doesn't completely rule out a rate cut or lock
in a rate hike for that matter, but it's really
one of those ones that the RBA just doesn't want
to see one or two or three months of information.
They need to see, as you said, confirmation that that
inflation rate is back on track. To be the middle
or below the middle of the target band. They need
to see confirmation one way or another on what's happening
to the labor market, including those wage numbers. So reading
(02:26):
the minutes, they're clearly getting ready for the for the
Christmas parties, end of year celebrations, and the bit of
time at the beach because they're not going to be
doing anything on monetary policy.
Speaker 1 (02:37):
So when you say that then they like to wait
and see the data. They generally then have a bias
towards holding that is that the case?
Speaker 2 (02:44):
Yes, so on hold correct?
Speaker 1 (02:46):
Ye okay, all right, this week we obviously we talked
about inflation there about the fact that this is the
key thing, the pivotal thing. We get the monthly inflation
data out this week. Now, correct me if I'm wrong.
Is this the first time that we are getting the
comprehensive set of monthly numbers rather than the kind of
(03:06):
the partial print that we've had in the past.
Speaker 2 (03:08):
Michael, you're spot on. This is the one that we've
all been waiting for, for some of us for decades actually.
But this is a comprehensive monthly Now the ABS, the
Bureau of Statistics has produced what they might term an
experimental or a partial monthly inflation indicator, and it's been
useful for getting little bits and information on data in
(03:30):
between getting the quarterly results. So this is the one
that actually is a fairly comprehensive survey, similar to the
methodology used internationally. And most other countries have monthly inflation numbers,
so we'll be watching this one with a great deal
of interest. It might just take us, all us economists
so were used to look at the quarterly numbers a
little bit more time just to digest what's in and
(03:50):
what's out, and what's trimmed out, and the whole gamut
of information that's going to be there on the monthly CPI.
But that set it looks like a pretty good serve
of price pressures in the economy, and it could just
sort of sway market sentiment one way or another if
we get something outside expectations.
Speaker 1 (04:10):
So does it have then limited value as a comparison
to the previous month, because that's the end of the
old data, and now we're going to start a new
and you're going to need to wait and see a
few months and see how it tracks.
Speaker 2 (04:21):
Last week, the Bureau Statistics put out a revised monthly
series based on the new methodology. What they have been doing,
in their wisdom is producing the experimental or the partial
one and publishing that. But they've also been producing the
more comprehensive one, but hadn't published it until last week.
They didn't want to publish it because they just wanted
(04:41):
to check that it was okay, that they didn't have
any inherent biases or errors in their methodology. So we
do know what the history is, the revised history, so
it will be actually know something pretty meaningful, and I
think once we get used to it and the market
gets used to it, it'll become one of the clearly
top tier economic release each month.
Speaker 1 (05:00):
Okay, what kind of number are we looking for?
Speaker 2 (05:03):
Yeah, of course, yeah, we're looking for an annual figure,
the headline figure probably staying around about that three point
three three point four percent, because a lot of the
what we call administered prices, prices of childcare and electricity
for example, where the subsidies are being phased out, have spiked.
They've unwound that reduction. The trimmed mean or that underlying
(05:26):
inflation measures probably going to be holding just to smidge
a tenth or two below three percent, so sort of
not horrendous, but just a little too high for the
RBA and the market's confidence about getting that next rate cut.
So we're looking for a figure headline three point four.
The trims mean about two point nine percent and annual terms.
All right.
Speaker 1 (05:46):
The other big thing this week is private capex, which is,
as you've said in the past, this is important for productivity.
Take us through kind of how it's I'd love to
know how it's measured and why it matters so much.
Speaker 2 (06:00):
The Bureau of Statistics do two components to this CAPEX
Capital Expenditure survey for the private sector. One is the
actual expenditure for the quarter. This is the September quarter number.
It's probably going to be flat, which is a little
bit disappointing. But they also ask, this is the other
really important part of this CAPEX survey, expected investment for
the next financial year. So they asked firms, well, how
(06:23):
much money did you invest in the quarter. I bought
some machinery and equipment and a new building and construction
activity or artificial intelligence. They're investing in those sorts of things,
and that is the actual number. But then businesses sort
of respond all say, oh, look, planning on spending two
point five billion next year or one hundred million next year,
and they add them up to the expectations numbers. So
(06:44):
it's not only the actual result, obviously very important that
broadly feeds into the GDP numbers for the September quarter,
which come out in early December, but it's the expectations.
It's sort of like a great big business confidence survey
when it comes to cap X, and if businesses are
feeling optimistic, A lot of CAPEX takes time to come
(07:07):
to fruition. So if you are wanting to build a
new warehouse, for example, you don't build it in a quarter,
so you're expected CAPEX might be two billion over the
course of the next couple of years, but you're only
outlaying a quarter of billion dollars every quarter. So that's
why the expectations numbers are so important.
Speaker 1 (07:28):
All right now, I should have mentioned this before when
we were talking about the Reserve Bank and about the
fact that the RBA likes to wait and see the
data if there are any concerns that they just want
to wait and see how things play out. And I
think we have to spare a thought for the FED,
the Federal Reserve in the US because late last week
it was confirmed from the Bureau of Labor Statistics, and
(07:48):
this is after the government shutdown has ended, that the
October jobs report isn't going to be released independently. Part
of it's all going to come out with the November
jobs report. That's all going to happen in mid December,
which is after the FED next meets. And so you've
got to say it makes it very very difficult for
the FED to do its job right.
Speaker 2 (08:10):
Well. Indeed, of course central banks, our Reserve Bank and
the US Federal Reserve on economic news to determine all
is inflation high or low? Is unemployment high or low?
Are we creating a lot of jobs or not many jobs,
or are we losing jobs? And of course, with the shutdown,
the Bureau of Labor Statistics, who are the body that
produced the bulk of the government statistics over there that
(08:31):
the FED relies on, and financial markets for that matter,
have not been producing anything. Now they're sort of playing
catch up that the lockdown or the shutdown has ended,
and the period where they was shut down for the
data just wasn't collected. So there's a sort of a
little bit of catch up, and as you alluded to,
the FED meeting will be flying blind, I think is
(08:52):
the terminology. They'll be sort of sitting down with anecdotal
evidence about you know, they've got various private sector surveys
due to supply management, surveys of construction, of services, of
manufacturing are useful indicators, but they're not the hand on
your heart, this is what the economy is doing sort
of indicators. So they'll be assessing monetary policy from a
(09:14):
perspective with you know, pretty limited data. As you said,
it doesn't come out and they don't resume that business
as usual data flow until after the December meeting of
the FIMC. So that's one reason why the market has
gone from pricing in a high probability of a rate
cut to one where it's sort of seen to be well,
(09:35):
they'd be playing with fire if they were to cut
rates not knowing what inflation's doing and what the labor market's.
Speaker 1 (09:41):
Doing, especially when it is a time when there is
probably more disagreement within the FED about rates than there
has been in kind of recent memory, isn't there because
they've got the minutes effectively showing that there were I
think strongly differing views was which is the quote which
(10:02):
usually these decisions are either unanimous or pretty close to unanimous.
Speaker 2 (10:07):
Indeed. And so one of the things that I think
a lot of us have been doing is looking at
what the various FED members have been talking about. Unlike
our Reserve Bankboard that doesn't speak a lot, they don't
give a lot of speeches unless you're the official RBA
staff in the US, the FED officials talk a lot.
And so we've been looking at what they've been saying.
(10:28):
And there's various hawks and doves and people who are
neutral and trying to weigh up what they're saying. And
there seems to be this skewing of views of the
people who matter, the ones who make the decision on
US interest rates, saying, look, we just really want to
sit tight. We want to The economy is doing okay.
You know, the stock markets rebounded nicely. We had a
(10:49):
little bit of a pull off, a pullback earlier, and
it's recovered quite nicely. So they're sort of saying they
want to wait and see. And if they want to
wait and see, the signals coming through pretty clear rates
on hold. So watch what the Fed officials are talking
about over the course of this week too, because that's
going to be a pretty good guide on what they're
(11:09):
going to be thinking when they sit down to discuss
whether rate should be cut or left unchanged.
Speaker 1 (11:14):
Exciting times. Thank you very much, Steven, Thank you, Michael.
That was economist Stephen Coo Coolest, better known as the Kook.
You can find him at the kook dot com and
follow him on X of course using the handle the Kook.
I'm Michael Thompson and this is Fear and Greed Q
and a
Welcome to Fear and Greed Q and A where we
ask and answer questions about business, investing, economics, politics and more.
I'm Michael Thompson and every Monday morning we are joined
by economist Stephen Coucoulis to look at the week ahead.
You'll find him at the kook dot com that is
thg kouk dot com and on X using the handle
of the Kirk Stephen.
Speaker 2 (00:24):
Good morning, top of the morning to you, Michael.
Speaker 1 (00:26):
We have got so much to talk about about what's
coming up this week, but before we do that, we
need to put a few things to bed from last
week wages data. We talked last Monday about how important
it was. What did you make of the figures?
Speaker 2 (00:40):
Yeah, Well, the headline figure, the zero point eight percent
increase in the wage pricing next for the September quarter
three point four percent in annual terms, spot on expectations.
So in a sense it went through to the keeper
and it was not really that sort of market moving thing. However,
there were a few little snippets of information that were
(01:02):
interesting in that some of the resilience was in public
sector wages growth and the private sector wages growth the
one that's more sensitive to interest rate settings actually slowed
to three point two percent, its lowest in three and
a half years.
Speaker 1 (01:17):
Okay, the other big thing last week was the release
of the minutes of the Reserve Bank Board meeting that
had happened two weeks prior and really show that the
central Bank's got no plans to cut rates unless inflation
data improves, right, So it it really feels like the
(01:38):
there's nothing going to be happening in the near future.
Speaker 2 (01:40):
And it's interesting you spot on. That's that's the first thing.
And the second thing is that we do know that
when the RBA pauses and they pause for a long
period of time, if we look back at history when
they've done a few cuts or done a few hikes,
and you know, they decide to look, well, just wait
and see what happens. There are many examples where it's
been a year sometimes more between interest rate moves. So
(02:03):
it doesn't completely rule out a rate cut or lock
in a rate hike for that matter, but it's really
one of those ones that the RBA just doesn't want
to see one or two or three months of information.
They need to see, as you said, confirmation that that
inflation rate is back on track. To be the middle
or below the middle of the target band. They need
to see confirmation one way or another on what's happening
to the labor market, including those wage numbers. So reading
(02:26):
the minutes, they're clearly getting ready for the for the
Christmas parties, end of year celebrations, and the bit of
time at the beach because they're not going to be
doing anything on monetary policy.
Speaker 1 (02:37):
So when you say that then they like to wait
and see the data. They generally then have a bias
towards holding that is that the case?
Speaker 2 (02:44):
Yes, so on hold correct?
Speaker 1 (02:46):
Ye okay, all right, this week we obviously we talked
about inflation there about the fact that this is the
key thing, the pivotal thing. We get the monthly inflation
data out this week. Now, correct me if I'm wrong.
Is this the first time that we are getting the
comprehensive set of monthly numbers rather than the kind of
(03:06):
the partial print that we've had in the past.
Speaker 2 (03:08):
Michael, you're spot on. This is the one that we've
all been waiting for, for some of us for decades actually.
But this is a comprehensive monthly Now the ABS, the
Bureau of Statistics has produced what they might term an
experimental or a partial monthly inflation indicator, and it's been
useful for getting little bits and information on data in
(03:30):
between getting the quarterly results. So this is the one
that actually is a fairly comprehensive survey, similar to the
methodology used internationally. And most other countries have monthly inflation numbers,
so we'll be watching this one with a great deal
of interest. It might just take us, all us economists
so were used to look at the quarterly numbers a
little bit more time just to digest what's in and
(03:50):
what's out, and what's trimmed out, and the whole gamut
of information that's going to be there on the monthly CPI.
But that set it looks like a pretty good serve
of price pressures in the economy, and it could just
sort of sway market sentiment one way or another if
we get something outside expectations.
Speaker 1 (04:10):
So does it have then limited value as a comparison
to the previous month, because that's the end of the
old data, and now we're going to start a new
and you're going to need to wait and see a
few months and see how it tracks.
Speaker 2 (04:21):
Last week, the Bureau Statistics put out a revised monthly
series based on the new methodology. What they have been doing,
in their wisdom is producing the experimental or the partial
one and publishing that. But they've also been producing the
more comprehensive one, but hadn't published it until last week.
They didn't want to publish it because they just wanted
(04:41):
to check that it was okay, that they didn't have
any inherent biases or errors in their methodology. So we
do know what the history is, the revised history, so
it will be actually know something pretty meaningful, and I
think once we get used to it and the market
gets used to it, it'll become one of the clearly
top tier economic release each month.
Speaker 1 (05:00):
Okay, what kind of number are we looking for?
Speaker 2 (05:03):
Yeah, of course, yeah, we're looking for an annual figure,
the headline figure probably staying around about that three point
three three point four percent, because a lot of the
what we call administered prices, prices of childcare and electricity
for example, where the subsidies are being phased out, have spiked.
They've unwound that reduction. The trimmed mean or that underlying
(05:26):
inflation measures probably going to be holding just to smidge
a tenth or two below three percent, so sort of
not horrendous, but just a little too high for the
RBA and the market's confidence about getting that next rate cut.
So we're looking for a figure headline three point four.
The trims mean about two point nine percent and annual terms.
All right.
Speaker 1 (05:46):
The other big thing this week is private capex, which is,
as you've said in the past, this is important for productivity.
Take us through kind of how it's I'd love to
know how it's measured and why it matters so much.
Speaker 2 (06:00):
The Bureau of Statistics do two components to this CAPEX
Capital Expenditure survey for the private sector. One is the
actual expenditure for the quarter. This is the September quarter number.
It's probably going to be flat, which is a little
bit disappointing. But they also ask, this is the other
really important part of this CAPEX survey, expected investment for
the next financial year. So they asked firms, well, how
(06:23):
much money did you invest in the quarter. I bought
some machinery and equipment and a new building and construction
activity or artificial intelligence. They're investing in those sorts of things,
and that is the actual number. But then businesses sort
of respond all say, oh, look, planning on spending two
point five billion next year or one hundred million next year,
and they add them up to the expectations numbers. So
(06:44):
it's not only the actual result, obviously very important that
broadly feeds into the GDP numbers for the September quarter,
which come out in early December, but it's the expectations.
It's sort of like a great big business confidence survey
when it comes to cap X, and if businesses are
feeling optimistic, A lot of CAPEX takes time to come
(07:07):
to fruition. So if you are wanting to build a
new warehouse, for example, you don't build it in a quarter,
so you're expected CAPEX might be two billion over the
course of the next couple of years, but you're only
outlaying a quarter of billion dollars every quarter. So that's
why the expectations numbers are so important.
Speaker 1 (07:28):
All right now, I should have mentioned this before when
we were talking about the Reserve Bank and about the
fact that the RBA likes to wait and see the
data if there are any concerns that they just want
to wait and see how things play out. And I
think we have to spare a thought for the FED,
the Federal Reserve in the US because late last week
it was confirmed from the Bureau of Labor Statistics, and
(07:48):
this is after the government shutdown has ended, that the
October jobs report isn't going to be released independently. Part
of it's all going to come out with the November
jobs report. That's all going to happen in mid December,
which is after the FED next meets. And so you've
got to say it makes it very very difficult for
the FED to do its job right.
Speaker 2 (08:10):
Well. Indeed, of course central banks, our Reserve Bank and
the US Federal Reserve on economic news to determine all
is inflation high or low? Is unemployment high or low?
Are we creating a lot of jobs or not many jobs,
or are we losing jobs? And of course, with the shutdown,
the Bureau of Labor Statistics, who are the body that
produced the bulk of the government statistics over there that
(08:31):
the FED relies on, and financial markets for that matter,
have not been producing anything. Now they're sort of playing
catch up that the lockdown or the shutdown has ended,
and the period where they was shut down for the
data just wasn't collected. So there's a sort of a
little bit of catch up, and as you alluded to,
the FED meeting will be flying blind, I think is
(08:52):
the terminology. They'll be sort of sitting down with anecdotal
evidence about you know, they've got various private sector surveys
due to supply management, surveys of construction, of services, of
manufacturing are useful indicators, but they're not the hand on
your heart, this is what the economy is doing sort
of indicators. So they'll be assessing monetary policy from a
(09:14):
perspective with you know, pretty limited data. As you said,
it doesn't come out and they don't resume that business
as usual data flow until after the December meeting of
the FIMC. So that's one reason why the market has
gone from pricing in a high probability of a rate
cut to one where it's sort of seen to be well,
(09:35):
they'd be playing with fire if they were to cut
rates not knowing what inflation's doing and what the labor market's.
Speaker 1 (09:41):
Doing, especially when it is a time when there is
probably more disagreement within the FED about rates than there
has been in kind of recent memory, isn't there because
they've got the minutes effectively showing that there were I
think strongly differing views was which is the quote which
(10:02):
usually these decisions are either unanimous or pretty close to unanimous.
Speaker 2 (10:07):
Indeed. And so one of the things that I think
a lot of us have been doing is looking at
what the various FED members have been talking about. Unlike
our Reserve Bankboard that doesn't speak a lot, they don't
give a lot of speeches unless you're the official RBA
staff in the US, the FED officials talk a lot.
And so we've been looking at what they've been saying.
(10:28):
And there's various hawks and doves and people who are
neutral and trying to weigh up what they're saying. And
there seems to be this skewing of views of the
people who matter, the ones who make the decision on
US interest rates, saying, look, we just really want to
sit tight. We want to The economy is doing okay.
You know, the stock markets rebounded nicely. We had a
(10:49):
little bit of a pull off, a pullback earlier, and
it's recovered quite nicely. So they're sort of saying they
want to wait and see. And if they want to
wait and see, the signals coming through pretty clear rates
on hold. So watch what the Fed officials are talking
about over the course of this week too, because that's
going to be a pretty good guide on what they're
(11:09):
going to be thinking when they sit down to discuss
whether rate should be cut or left unchanged.
Speaker 1 (11:14):
Exciting times. Thank you very much, Steven, Thank you, Michael.
That was economist Stephen Coo Coolest, better known as the Kook.
You can find him at the kook dot com and
follow him on X of course using the handle the Kook.
I'm Michael Thompson and this is Fear and Greed Q
and a
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