Inflation, interest rates set to fall in second half of the year, top lender forecasts
Weakened household consumption means the economy will slow in 2024, according to CBA’s economic outlook
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Australia is likely to remain in the current per capita recession until the second half of the year, with the “distinct possibility” of a quarterly contraction in economic activity, according to the Commonwealth Bank’s 2024 economic outlook released yesterday. Growth in our gross domestic product (GDP) is likely to be below trend despite continuing strong population growth this year.
CBA forecasts annual inflation to fall to 3 percent by the end of the year, with unemployment to increase from 3.9 percent today to 4.5 percent. This will enable the Reserve Bank to commence interest rate cuts from September, with CBA expecting a total reduction of 75basis points (bps) in 2024 and a further 75 bps in the first half of 2025. CBA does not expect any rate rises beforehand.
“At the heart of our forecast for below-trend growth is continued weakness in household consumption,” said Gareth Aird, CBA’s head of Australian economics. “Real household consumption was just 0.4 percent per year in Q3 23. Against the backdrop of approximately 2.5 percent population growth there has been a big contraction in the volume of spend per person.”
Mr Aird said the compounding forces of weak real wages growth, considerably higher mortgage repayments and the impact of bracket creep on tax liabilities will all weigh on spending in the first half of 2024. “There is no circuit breaker on the horizon in the short run to boost consumer demand. As such, we expect household consumption per capita will continue to contract over coming quarters. And there is a very real risk that total household consumption also declines.”
CBA expects home values in Australia’s capital cities to lift by 5 percent over 2024. CoreLogic data shows a 9.3 percent increase in 2023, largely due to supply constraints in key markets such as Sydney. CBA senior economist Belinda Allen said the imbalance between demand, driven by elevated population growth, and low supply was set to continue this year.
“Many of the same factors that drove prices higher are set to be in place in 2024, albeit with less intensity,” Ms Allen explained. “However we expect affordability constraints and rising advertised supply to put a handbrake on home price growth over the first half or so of 2024.”
The property market is likely to go through “a distinct period of moderation” in the first half, including small monthly falls in Sydney and Melbourne. Ms Allen said Australia’s two biggest cities are forecast to be weaker than the smaller capitals over the first half, but rate cuts from September will spur price growth everywhere. Overall, CBA is tipping home values to rise by 2 percent in Melbourne, 3 percent in Sydney, 8 percent in Brisbane and 9 percent in Adelaide and Perth.
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The lunar flyby would be the deepest humans have traveled in space in decades.
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It’s go time for the highest-stakes mission at NASA in more than 50 years.
On April 1, the agency is set to launch four astronauts around the moon, the deepest human spaceflight since the final Apollo lunar landing in 1972.
The launch window for Artemis II , as the mission is called, opens at 6:24 p.m. ET.
National Aeronautics and Space Administration teams have been preparing the vehicles to depart from Florida’s Kennedy Space Center on the planned roughly 10-day trip. Crew members have trained for years for this moment.
Reid Wiseman, the NASA astronaut serving as mission commander, said he doesn’t fear taking the voyage. A widower, he does worry at times about what he is putting his daughters through.
“I could have a very comfortable life for them,” Wiseman said in an interview last September.
“But I’m also a human, and I see the spirit in their eyes that is burning in my soul too. And so we’ve just got to never stop going.”
Wiseman’s crewmates on Artemis II are NASA’s Victor Glover and Christina Koch, as well as Canadian Space Agency astronaut Jeremy Hansen.
What are the goals for Artemis II?
The biggest one: Safely fly the crew on vehicles that have never carried astronauts before.
The towering Space Launch System rocket has the job of lofting a vehicle called Orion into space and on its way to the moon.
Orion is designed to carry the crew around the moon and back. Myriad systems on the ship—life support, communications, navigation—will be tested with the astronauts on board.
SLS and Orion don’t have much flight experience. The vehicles last flew in 2022, when the agency completed its uncrewed Artemis I mission .
How is the mission expected to unfold?
Artemis II will begin when SLS takes off from a launchpad in Florida with Orion stacked on top of it.
The so-called upper stage of SLS will later separate from the main part of the rocket with Orion attached, and use its engine to set up the latter vehicle for a push to the moon.
After Orion separates from the upper stage, it will conduct what is called a translunar injection—the engine firing that commits Orion to soaring out to the moon. It will fly to the moon over the course of a few days and travel around its far side.
Orion will face a tough return home after speeding through space. As it hits Earth’s atmosphere, Orion will be flying at 25,000 miles an hour and face temperatures of 5,000 degrees as it slows down. The capsule is designed to land under parachutes in the Pacific Ocean, not far from San Diego.
Is it possible Artemis II will be delayed?
Yes.
For safety reasons, the agency won’t launch if certain tough weather conditions roll through the Cape Canaveral, Fla., area. Delays caused by technical problems are possible, too. NASA has other dates identified for the mission if it doesn’t begin April 1.
Who are the astronauts flying on Artemis II?
The crew will be led by Wiseman, a retired Navy pilot who completed military deployments before joining NASA’s astronaut corps. He traveled to the International Space Station in 2014.
Two other astronauts will represent NASA during the mission: Glover, an experienced Navy pilot, and Koch, who began her career as an electrical engineer for the agency and once spent a year at a research station in the South Pole. Both have traveled to the space station before.
Hansen is a military pilot who joined Canada’s astronaut corps in 2009. He will be making his first trip to space.
Koch’s participation in Artemis II will mark the first time a woman has flown beyond orbits near Earth. Glover and Hansen will be the first African-American and non-American astronauts, respectively, to do the same.
What will the astronauts do during the flight?
The astronauts will evaluate how Orion flies, practice emergency procedures and capture images of the far side of the moon for scientific and exploration purposes (they may become the first humans to see parts of the far side of the lunar surface). Health-tracking projects of the astronauts are designed to inform future missions.
Those efforts will play out in Orion’s crew module, which has about two minivans worth of living area.
On board, the astronauts will spend about 30 minutes a day exercising, using a device that allows them to do dead lifts, rowing and more. Sleep will come in eight-hour stretches in hammocks.
There is a custom-made warmer for meals, with beef brisket and veggie quiche on the menu.
Each astronaut is permitted two flavored beverages a day, including coffee. The crew will hold one hourlong shared meal each day.
The Universal Waste Management System—that’s the toilet—uses air flow to pull fluid and solid waste away into containers.
What happens after Artemis II?
Assuming it goes well, NASA will march on to Artemis III, scheduled for next year. During that operation, NASA plans to launch Orion with crew members on board and have the ship practice docking with lunar-lander vehicles that Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin have been developing. The rendezvous operations will occur relatively close to Earth.
NASA hopes that its contractors and the agency itself are ready to attempt one or more lunar landing missions in 2028. Many current and former spaceflight officials are skeptical that timeline is feasible.
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