00:01I mean, we've routinely seen unemployment rise to, well, sometimes, occasionally, even
00:07into the teens.
00:08And for a long period of time, most economists thought that 5% was the natural level of unemployment.
00:15That's when you've got full employment in the economy.
00:17So to have it at 4.1% over an extended period of time, it does show that, well, we're
00:24creating
00:24a lot of jobs and that's keeping a lot of people off the dole.
00:27The economy is certainly running pretty well at full capacity.
00:30There's no doubt about that.
00:31And at 4.1%, I mean, I think the Reserve Bank would probably like to see a higher level
00:37of unemployment.
00:37But we've come through an incredible period, really, where you've had a pandemic.
00:42Then you've had this global outbreak of inflation with an incredible lift in interest rates,
00:47which ordinarily would have put a lot of people out of work.
00:50And it hasn't happened.
00:51And that primarily is down to, I guess, the level of government spending that we've seen
00:55during that period, which has kept people in a job.
00:58Now, there's no doubt that government spending adds to demand.
01:01But final public demand is actually waning at the moment.
01:05And really, if you look at the public sector versus the private sector, the private sector
01:10has a much bigger impact on inflation and on the economy than the public sector.
01:15And it's private sector growth that is fuelling this incredible rise in demand.
01:20We've seen the inflation numbers show that consumer goods, particularly in larger purchase
01:27goods, what's known as durable goods, and also business investment has really been firing
01:32up demand.
01:33So it's that growth in the private sector over the past, I guess, eight to 10 months that
01:38has really set the economy alight.
01:40And one factor that hasn't really been raised in all of this is the exchange rate.
01:45Now, we've seen the Australian dollar rise about 10 percent against the US dollar and
01:50about more than 7 percent against the basket of currencies that we, countries we trade with.
01:55Now, that higher dollar feeds into lower inflation and quite a decent clip off inflation.
02:02So, and that's because so much of what we consume in this country is brought in from overseas.
02:08So when we get a stronger dollar, that means what we buy and what we consume costs a lot less.
02:14So we are lucky to see that impact later, you know, through the course of this year.
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