Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Wednesday, 11 February 2015

Pushing on a string?

Strongest US job openings since January 2001

The US Bureau of Labor Statistics released its job openings or "JOLTS" data which showed a strong expansion in job openings.

The seasonally adjusted result of 5.028 million was a material increase on November's 4.847 million and a huge 28.5 percent leap on the prior year equivalent figure.

December's result was the highest level of job openings seen in the US in nearly 14 years since January 2001.

Increased job openings tend to be seen as a positive signal for the economy.

Perhaps as significantly, this accelerated the job openings rate increased to 3.5 percent, which is also a rate not seen since long before the "Great Recession".

There was an increase in the number of Americans voluntarily quitting their jobs in December to 2.7 million from prior year equivalent figure of 2.3 million, which may be reflective of increased confidence in the labour market.

There has been a great deal of debate as to whether the US experiment with quantitative easing would work or whether it would be akin to Keynes' pushing on a string, causing more damaging distortions than benefits to the economy.

Given that this result comes off the back of the strongest US employment growth in 17 years it seems that the asset purchasing programs have had the desired effect on the labour market.

Housing finance today

Meanwhile back on home soil, later this morning the ABS will release its Housing Finance data for the month of December 2014.

My analysis of the November 2014 data showed that despite misleading media analysis of "falling housing finance figures" (the monthly figures were down a notch) over the past quarter the data has been shattering all kinds of records.

In particular, the pace of investment housing lending has been ramping up at an exuberant pace over the past year.

This has particularly been so in Sydney, where investor lending is smoking records by the month.

There is a fair chance that this morning's December figures release may be softer from such elevated levels, but this of course is retrospective data which pre-dates another interest rate cut in February.

Anecdotally mortgage brokers have reported a renewed surged in activity this week, but such hearsay will not be confirmed or otherwise by the official data for a couple of months.

With easier monetary policy still likely to follow - and average mortgage rates falling anyway as previously fixed loans originally written pre-2013 are refinanced - it is too early to write off this property market cycle.

The up-cycle looks to have legs left in it yet, as the Reserve Bank hopes to spark a boom in consumption via rising prices.