According to one of the world’s largest financial institutions, the worst is still to come, and Australians will be feeling the brunt of the global recession for some time.
The Sydney branch of JP Morgan says while the economy has so far not entered a technical recession, all the symptoms of a recession are in place.
Unemployment is rising, workers’ hours have been slashed, wage growth is slowing and the decline in corporate profits is driving a collapse in business investment, it says.
JP Morgan economist Helen Kevans said the fading impact of cash handouts from the federal government will be felt in the second half of this year, heightening challenges facing the consumer, stemming from rising unemployment, softer wage growth, rising mortgage rates and higher petrol prices.
New data released on Monday by the ABS has already shown that households are reluctant to take on new loans in the current environment, with the value of personal loans falling by 2.9 percent in May, the lowest amount since November 2005.
However, all is not lost, with results from the NSW Business Chamber Business Conditions Survey indicating 30 percent of Australian businesses expect conditions will improve over the coming months.
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