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Election blow for Coalition as Australia falls into per-capita recession | Business | The Guardian

Labor says slow growth ‘is a damning indictment of the economic stewardship of Scott Morrison and Josh Frydenberg’. Australia has fallen into a per-capita recession for the first time in 13 years, as a slowing economy buffets the government’s strong economic message just three months out from the federal election. Scott Morrison has increasingly staked…

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Election blow for Coalition as Australia falls into per-capita recession | Business | The Guardian

Labor says slow growth ‘is a damning indictment of the economic stewardship of Scott Morrison and Josh Frydenberg’. Australia has fallen into a per-capita recession for the first time in 13 years, as a slowing economy buffets the government’s strong economic message just three months out from the federal election.
Scott Morrison has increasingly staked the Coalition’s election chances on the economy, warning repeatedly “the economy will be weaker under Labor”. This week the prime minister again sounded the alarm that voters could see a return to 1991 recession conditions under a Shorten government.

Morrison honed his message in a speech to the Australian Financial Review Business Summit on Tuesday, shaping the election as a contest between “enterprise and envy”.
Scott Morrison again links Labor with recession after previously ruling it out Read more
But Australian Bureau of Statistics data released on Wednesday show the economy grew by 2.3% over the year, and just 0.2% for the December quarter, short of the Reserve Bank forecast of 0.

6% and market expectations.
However it was the “GDP per capita” measure that caught the eye of the market and economists.

Population grew 0.4% in the quarter, meaning per capita economic growth has fallen into negative territory for two consecutive quarters, -0.

1% in September and -0.2% in December, for the first time since 2006.
The technical definition of a recession is negative growth in two consecutive quarters. While the labour market has continued to grow, spending has not, with a weakening east coast housing market another indicator of a tightening economy.
The ABS data shows population growth helped sustain the economy, presenting a further problem for the government which has indicated it would like to reduce the migration intake cap, although Morrison has warned that cannot be done at the expense of the economy .
In response to the figures, the Australian dollar fell to a two-month low, from US70.

88c to US70.34c.
Economists at the investment bank JP Morgan predicted the Reserve Bank would be forced to cut interest rates twice this year in order to stimulate the slowing economy, starting with a reduction as early as July.
The falling currency and the prospect of cheaper borrowing was a boon for the ASX200, however, with the index rising 46.3 points, or 0.75%, to 6,245.

6 points.
The treasurer, Josh Frydenberg , focused on the good news while delivering the results, complete with a slide show.
“Australia continues to grow faster than any G7 nation except the United States,” he said.
While companies are doing well, workers and households have been left behind | Greg Jericho Read more
“Over the past 12 months, more than 270,000 new jobs were created and more than eight out of every 10 of these jobs were full-time.

Frydenberg said the proportion of the working-age population in employment was at a record high, and pointed to a 2.4% increase in non-mining investment over the quarter.
“There is also continuing evidence that private business investment is benefiting from increased public infrastructure investments as firms invest in machinery and equipment to deliver these projects.”
Josh Frydenberg (@JoshFrydenberg) Worth remembering that in 2000 & 2006 the Howard Govt had consecutive quarters of negative GDP per capita growth & Rudd & Gillard had 5 negative quarters.

Better indicator of living standards is real net national disposable income per capita which is above its 20 yr average.
March 6, 2019 But the government is struggling to balance the new figures with its warnings of what a future Labor government could do to the economy.
“If the Labor party have their chance to implement $200bn of taxes, that is nearly the size of the New Zealand economy … and that is what they are going to lay over the Australian economy ,” Frydenberg said.
“The Labor party used to believe in a tax to GDP ratio, they used to believe in a cap to the amount of tax you could spend.

But now they no longer believe in that.”
The shadow treasurer, Chris Bowen , said while Morrison “was warning in his normal political fashion, scaring [people] about the prospect of a recession under a Labor government, the simple fact is there is a per-capita recession on today”.
“This is a damning indictment of the economic stewardship of Scott Morrison and Josh Frydenberg.
“Wages are not growing fast enough … we have now had eight quarters of negative productivity growth.”
Labor has not committed to saying when it would implement its grandfathered negative gearing policy , given the slowing housing market and falling house prices across east-coast cities.
But in his own speech to the AFR Business Summit, Bill Shorten said Labor’s plan for the economy was more than just one policy.

It was time to look at setting a living wage, he said, not a minimum wage.
Topics Australian economy Coalition Scott Morrison Australian politics Labor party Business (Australia) Interest rates Australia news.

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There are 3 fundamental money concepts most people still don’t grasp

Author and financial expert David Bach says many people still don’t understand some personal finance basics. Bach is a champion of the “pay yourself first” strategy, which prioritizes automatic savings . He also says it’s important to understand how your money can grow in a retirement account, and that you can’t predict the stock market.…

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There are 3 fundamental money concepts most people still don’t grasp

Author and financial expert David Bach says many people still don’t understand some personal finance basics. Bach is a champion of the “pay yourself first” strategy, which prioritizes automatic savings . He also says it’s important to understand how your money can grow in a retirement account, and that you can’t predict the stock market. Personal finance is a complicated subject, and chances are you weren’t required to take an introductory financial literacy course in high school or college.

Perhaps you, like me, were left to school yourself on topics like investing, taxes , debt, and saving for retirement once you entered adulthood.

As commendable as that may be, David Bach, who has spent 25 years in the wealth management industry and is the author of ” The Automatic Millionaire ,” says there are three simple, basic money concepts that many of us are still missing.

1. You need to ‘pay yourself first’ “People still don’t grasp the fact that they need to save a dime out of every dollar,” Bach told previously Business Insider in a Facebook Live interview . He said that the average American who’s saving money is saving just 15 minutes a day of their income, when they should be saving an hour .
Bach noted troubling research from the Federal Reserve that revealed nearly half of Americans wouldn’t have enough money on hand to cover a $400 emergency. Yet, he continued, millions of those people will buy a coffee at Starbucks today and expect to buy the new $800 iPhone next year. Americans have money, he says, but we aren’t saving it.

“It’s an American crisis. That’s why I’m still doing this at 50, because there’s still so many people that aren’t getting it,” Bach said.
So get on the “pay-yourself-first plan,” as Bach calls it, and automatically save an hour a day of your income. “When that money is moved before you can touch it, that’s how real wealth is built,” Bach, who became a millionaire by age 30 by increasing his automated savings over several years , told Business Insider.

Check out these offers from our partners to grow your savings:
2. You don’t ‘buy’ a retirement account Bach says that many Americans are confused by IRAs and 401(k)s and believe that they “own” a retirement account.
In reality, he says, “the retirement account is just a bucket and their investment is put inside that bucket. It’s those investments that go inside that bucket that create the return.


When you sign up for an employer-sponsored 401(k) you are contributing a designated percentage of your pretax income to that “bucket.

” As time passes, that money will compound and grow tax-free until you withdraw it upon retirement. In 2019, you can contribute up to $19,000 to your 401(k), or $25,000 if you’re over age 50.
Find out how much money you’ll need for retirement:
If you open up an individual retirement account, like a traditional IRA or Roth IRA , you can contribute up to $6,000, or $7,000 if you’re over 50, to each account in 2019.

The money in a traditional IRA will grow tax-free but is taxed upon retirement, whereas the money in a Roth IRA will be taxed before it goes into the account and is tax-free to withdraw upon retirement.
3. The stock market isn’t predictable Investing in the stock market is risky business , and it isn’t for everyone.
Still, Bach says he’s “constantly surprised” that people think they’re going to figure out the best time to buy and sell stocks by watching a TV show or reading an article. Unfortunately, the stock market is incredibly hard to predict, and trying to time it is often fruitless.
“You’d be better off with a boring, balanced approach that you invest systematically every two weeks and you leave it alone for your lifetime,” Bach said.

“And that’s not sexy, and that may not sell, but that’s what works.”
Personal Finance Insider offers tools and calculators to help you make smart decisions with your money.

We do not give investment advice or encourage you to buy or sell stocks or other financial products. What you decide to do with your money is up to you. If you take action based on one of the recommendations listed in the calculator, we get a small share of the revenue from our commerce partners..

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Dollar General will open 975 stores this year – CNN

New York (CNN Business) Dollar General keeps expanding even as discount rivals like Family Dollar shrink. The company said Thursday it will open 975 new stores in the United States this year. Dollar General will remodel 1,000 older stores with new queue lines to drive last-minute impulse buys. It will also spruce up its health…

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Dollar General will open 975 stores this year – CNN

New York (CNN Business) Dollar General keeps expanding even as discount rivals like Family Dollar shrink.
The company said Thursday it will open 975 new stores in the United States this year. Dollar General will remodel 1,000 older stores with new queue lines to drive last-minute impulse buys. It will also spruce up its health and beauty sections to lift sales. Dollar General has been growing for years in rural America. Dollar General ( DG ) opened 900 stores in 2018 and 1,315 the year prior. It has more than 15,300 stores across the country and sales have increased for 29 straight years. Despite a strong economy today, the uneven recovery in the United States has buoyed Dollar General .

“While the economy is doing very well, our core customer continues to struggle,” Dollar General chief executive Todd Vasos told analysts last year. Vasos said on Thursday that Dollar General is preparing for the consumer environment to weaken in the second half of the year. Read More The chain caters mainly to low-and-middle-income customers in rural and suburban areas. That helps it stand out against suburban chains like Dollar Tree ( DLTR ) and Family Dollar, which focuses on urban customers.

Family Dollar has struggled in recent years and will close nearly 400 stores this year . Family Dollar will close nearly 400 stores Dollar General looks to build stores in rural areas where big box retailers or grocery stores are not within 15 or 20 miles. That gives the company close proximity to shoppers and compels more frequent store visits.

The company says 75% of its locations are in towns with 20,000 or fewer people. Dollar General even surged during the holidays. Dollar General’s sales at stores open at least a year increased 4% during its most recent quarter compared with a year earlier, beating analysts’ expectations. The US government shutdown boosted Dollar General sales by 0.7% last quarter because the Agriculture Department doled out February SNAP benefits early, the company said.

It also got a lift from more shoppers buying food and home products, such as kitchenware and small appliances.

Despite strong sales, Dollar General’s stock dropped around 9% in early trading Thursday. Dollar General said it lowered prices on some merchandise during the holidays to win market share, but that dented its profit margins. Its profit forecast for 2019 also fell short of Wall Street’s expectations. The company wants to get current customers to spend more at stores and reach new shoppers, so it plans to introduce its own cosmetics and baby product brands this year.

Dollar General will also focus on selling more groceries and fresh food to grow its business. It is adding produce sections and refrigerators to hundreds of stores. Dollar General has said that offering fruit and vegetables at stores in rural and urban food deserts can “drive a tremendous amount of traffic.” The strategy could help Dollar General compete with bigger rivals such as Walmart ( WMT ) and beat back the threat of German discount grocery chains Aldi and Lidl. Aldi has poured billions of dollars into new stores with fresh food sections.

Lidl acquired a couple dozen Best Market grocery stores in New York and New Jersey last month. In addition, the company will roll out buy online, pickup in store at select stores for the first time later this year, a sign that Dollar General believes the popular digital option will take off in rural areas. Correction: An earlier version of this article misstated the number of Dollar General stores in the United States..

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A new survey shows that zero top US economists agreed with the basic principles of an economic theory supported by Alexandria Ocasio-Cortez

J. Scott Applewhite/AP Images Modern Monetary Theory is becoming a larger part of the economic conversation. The theory posits that government deficits are less concerning if a country controls its own currency and issues debt in that currency. MMT says the amount a government can spend is limited by real assets and the debt’s effect…

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A new survey shows that zero top US economists agreed with the basic principles of an economic theory supported by Alexandria Ocasio-Cortez

J. Scott Applewhite/AP Images Modern Monetary Theory is becoming a larger part of the economic conversation. The theory posits that government deficits are less concerning if a country controls its own currency and issues debt in that currency. MMT says the amount a government can spend is limited by real assets and the debt’s effect on the broader economy. MMT has received a huge amount of pushback. In a new survey, not a single mainstream economist agreed with the basic aspects of MMT. Modern Monetary Theory is having a moment.

The once fringe idea, known as MMT , has been vaulted into the national conversation as progressive economists and some politicians seize hold of the economic theory. Even Federal Reserve Chairman Jerome Powell has weighed in on MMT . But a new survey has found that while MMT may be getting attention, it does not have much support among some of the top US economists. Put (very) simply, MMT posits that a country that controls its own currency can continue to pay down its debt as long as it is denominated in that currency. So because the US prints dollars and issues debt in dollars, it can pay down its debts and does not need to rely on taxes to fund debt issuance.

Instead, the theory says, a country in the aforementioned situation is limited by the availability of real assets. So while we can’t just ignore the national debt, unlike a household budget the debt number — such as the US’s record $22 trillion debt load — doesn’t matter until inflation and economic effects show up. Explained to Marketplace by the economist Stephanie Kelton, an MMT proponent, Congress would use fiscal policy to control how much money goes into the economy. To borrow Marketplace’s metaphor, Congress would be a sink faucet, money would be the water, and the stoppered sink bowl would be the economy.

To deal with inflation (an overflow out of the bowl) you can lessen the flow of water into the bowl. Taxes would also act as the stopper letting money out of the economy sink bowl. The idea has gained a following among progressive economists and some politicians. Rep. Alexandria Ocasio-Cortez of New York told Business Insider in January that MMT should be “a larger part of our conversation.

” Read more: Alexandria Ocasio-Cortez says the theory that deficit spending is good for the economy should ‘absolutely’ be part of the conversation But the idea has also faced intense pushback from economists and pundits across the political spectrum , and none of the mainstream economists interviewed in a new survey were ready to sign on to the idea just yet. In the latest survey of 42 of America’s top economists by the University of Chicago Booth School of Business, not a single respondent agreed with the basic aspects of MMT: Thirty-six percent of economists disagreed, and 52% strongly disagreed with the statement “Countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt.” (Two percent had no opinion.) Twenty-six percent of economists disagreed, and 57% of economists strongly disagreed with the statement “Countries that borrow in their own currency can finance as much real government spending as they want by creating money.” (Seven percent had no opinion.) Some the responding economists said continued debt issuance would lead to persistent inflation problems and expressed concern about the long-term sustainability of MMT. .

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