Q+A: The Week Ahead | 29 June 2026
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What data and topics set the agenda for the week ahead?
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 and sharing his views on LinkedIn as well. Stephen, good morning. Good morning, Michael. We've got plenty to cover after last week's bumper crop of data. This week, we've also got building approvals, international trade, house prices for June from Cotality. But first to last week, right? We... What do we have? We had a bigger than expected uptick in underlying inflation, 3.6% annually. A drop in the unemployment rate to 4.4% after the creation of 40,000 or so jobs last month.
And household spending jumped as well, 1.3% in May, higher than expected. Put it all together, what is this telling us? Is the economy actually traveling better than one might think if one was being a bit negative?
Yeah, look, it's consistent with the view, and this is sort of like a more medium-term structural view of the economy. It is slowing down. The rate of economic growth is cooling a little bit. We're seeing that with the unemployment rate creeping up, month-to-month volatility. We've heard that argument for decades. The month-to-month numbers are all over the place. But if you put the trend line through, unemployment is going up. The household savings numbers are so hard to read now because they're being driven by a couple of things at the moment. One is that we're filling up our petrol tanks whenever we get the chance, and particularly while the petrol price is low, which it is right now, and before the excise reduction is phased out in coming months.
And there was a little bit of a quirk with... travel uh spending because of the rebates or what do you call i can't remember what these tickets are called when they were sort of like uh turned into travel credits during covid they're about to end so people book holidays and that's counted the spending numbers oh so where are we Slower economy. Inflation is still too high. That's the other thing. We know that from the underlying or the trimmed mean rate still being around about three and a half percent, up and down one or two tenths from that level. And yeah, it's one of those ones where something for everybody, but there's no definitive and sort of absolute slam dunk on where the economy is going and where interest rates are going.
That's the big question then. If the RBA was meeting this week, what would they make of it? Instead, they're meeting in August, so there's a bit more stuff to happen between now and then. But it does feel like they potentially have room to hike rates again if they need to.
Yeah, look, Andrew Houser, the Deputy Governor of the Reserve Bank, gave a bit of a fireside chat, I think it was, and he mentioned that sort of some of the things that I've been saying, so I don't know whether he's following me or I'm following him, probably the latter, but he said that we've done a lot, the three rate hikes, from an already relatively high starting point, so Australian cash rate at 4.35% is significantly higher than New Zealand, Canada, a lot of these other comparable economies.
What were last week’s surprising inflation, jobs and spending results?
So we've actually done a lot of the preemptive rate hikes and the other countries haven't really started yet. But he did say that we need to do that to keep inflation down. Look, if they were meeting this week, they'd probably sort of say, no, look, we've got a bias to hike, but we're not going to pull the trigger.
Yeah. Okay. On the inflation figures, just before we move on from all of that, If that is the – we were talking about this on Fear and Greed last week, that this is essentially like the second round effects of oil prices and the fact that now there's a lot of companies that seem to be passing on the increase in fuel prices, the transport, all of that kind of thing. How long before that kind of thing washes out of the system now that oil prices last week, for instance, went back –
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