This week’s
seemingly endless string of positive economic indicators continues with the
release of the Roy Morgan Consumer
Confidence Rating,
which after falling 13.3 points to 106.8 between the interest rate rise and the
federal budget, has recovered to be 8.3 points higher at 114.8. The main driver
behind the rise is the increased expectations of good economic times in the next
twelve months.

The boost in
consumer confidence comes on top of this week’s good news of the shrinking CAD,
above trend growth, improving terms of trade and stunningly low unemployment.
TD Securities’ monthly inflation result for May (3.2 % YTD) of course is not so
happy.

The Ozreports that yesterday’s 4.9% unemployment figures may be the outcome of JWH’s
IR laws: “Economists said yesterday that the drop in the unemployment rate to
4.9% last month may have been helped by the government move to ease
unfair dismissal laws, which made it easier for small businesses to hire
workers.”

The jobs growth
has everyone talking of another rate rise driven by wage inflation. Of course
if jobs growth is mainly due to the IR reform, wages growth may stay muted
despite generally good economic news, including strong demand for labour. With
the Australian economy looking stronger, the European Central Bank raising rates
for the third time in as many months, and the US looking to
continue their policy tightening, Henry is among those expecting another local
rate hike before long.

Worldwide
inflation worries mean volatility is still ruling the markets, with Wall St. suffering
significant falls overnight before bargain hunters pushed the markets back up.
Yesterday’s massive losses on the ASX were the largest single-day losses in five
years. The oil price fell by US$1 as reports came through that Abu Musab
al-Zarqawi, Iraq’s al-Qaeda
leader and the nation’s most wanted man, was killed in a US air
strike.

Henry has been
following the issue of radical Islam in the last week. Regular contributor Sir Wellington
Boot
has provided a reply to the prominent legal
mind who criticised Sir Wellington’s first
article supporting George Pell’s reflections on Islam.

Read more at
Henry Thornton.