Q+A: The Week Ahead | 20 July 2026
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What is the main topic discussed in this episode?
Welcome to Fear and Greed Q&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 Koukoulis. To look at the week ahead, you'll find him at thekouk.com, T-H-E-K-O-U-K.com, and sharing his views on LinkedIn as well. Stephen, good morning. And a very good morning to you, Michael. Now, Stephen, this week, there's only one major event, and that is the labor force figures coming out on Thursday, which we'll cover in a second. But I often joke about this episode being my private economics tutorial. So today I'm just going to lean right into that, if that's all right with you. And we're going to get a 101 on jobs.
Yes. So. If you are listening to this and have ever had to, I don't know, bluff your way through a conversation at work where unemployment has come up, this is for you. This is labor force, unemployment, underemployment, participation rates, all of it, and how it all fits into the bigger economic puzzle. First, though, Stephen, a prediction. What will we see this Thursday?
Well, one thing I've learned about the monthly labour force numbers is they're extremely volatile. So, for example, the last two months were minus 40,000, and people thought, oh, my goodness, this is the collapse of the labour market. The following month was plus 40,000. Oh, it's really strong now. And that's not to be critical of the Bureau of Statistics. They do a survey. They seasonally adjust the numbers to get the employment increase. So the current market thinking is we'll get a small rise again, maybe 15,000 in the month. of June. These are the June data. For the unemployment rate, which last month fell from 4.5% to 4.4%, possibly steady with a little bit of an upside risk that we see 4.5% unemployment rate again.
They're the critical issues. Any significant deviation from those two sort of central case forecasts of plus 15,000 for employment,
What jobs data and event are we focused on this week?
4.4% or 4.5% for the unemployment rate. That will be the thing that will cause markets to sort of reassess just where the economy's at.
All right. Let's break it all down now in that case. And we'll start with the obvious. If we're saying... might be looking at a 0.1% change, say from 4.5% to 4.4%. What exactly is that measuring? Is that as a percentage of all people who are able to work?
It's not that. What the unemployment rate measures, because the Bureau of Statistics, I'll tell you what the survey is in very broad terms. If you're one of the lucky householders to be in their survey for eight months and they circulate that around so they get a different sample size, which is why there is sampling variability from month to month, which is partly why there's the volatility, they ask you, did you work in paid employment in the last month? You say yes or no. If your answer is yes, then how many hours did you work so they can assess full-time, part-time employment and the aggregate hours worked in the whole economy? If you say no, I did not work in paid employment last month, they ask you a series of different questions.
For example, were you looking for work? And if you say no, because I'm retired or I'm of ill health or I'm home duties or whatever you're studying, whatever your excuse is, you are not unemployed. you are not in the labour force, even though you might be of working age population, but because of your personal circumstances, your employment status is not counted. Whereas if you answer that question, no, I didn't work, but yes, I am looking for work, I've applied for a million jobs and I haven't got any, you are counted as unemployed. And so that's where the change in the unemployment rate is so important because it does sort of discount people who are in studying and education, these sorts of things, which is absolutely fine, or people who might have won Powerball last week and they've left the labor force and they're not working, or people who are home duties.
And of course, you know, nowadays with the childcare and all these other things.
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