Think you've snagged a bargain online? It's you who's been snagged

By Millie Muroi, Economics Writer In a cost-of-living crisis, I’m sure I’m not the only bargain hunter who has put giant e-commerce sites Temu, Shein and Wish to the test.I’ve heard all the arguments against shopping online, and like most of my generation, I’ve shrugged off most of them, too. It’s how we do things when money is tight. Get with the program, or get old.One friend splashed cash on a giant stuffed pig from Temu...

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Working from home takes us back to the future

If there’s one good thing to come from this horrible year, surely it’s the breakthrough on WFH – working from home. This wonderful new idea – made possible only by the wonders of the internet – may have come by force, but for many of us it may be here to stay.If so, it will require a lot of changes around the place, and not just in the attitudes and practices of bosses and workers. With a marked decline in commuting – surely...

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News from the shopping trolley: retailers are doing it tough

If I told you that a big reason we're feeling such cost-of-living pressure is the increasing profits of the big supermarket chains, department stores, discount stores and other retailers, would you believe me? A lot of people would. But that would just show how little we understand of the strange things happening in the economy in recent years. The economy in which we live and work keeps changing and getting more complicated,...

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Digital disruption is changing us for better and worse

The rise of the internet and other aspects of the digital revolution has changed our working and private lives – mainly for the better. But all technological advance has its downside. We tend to soon take the benefits for granted and are only starting to understand the costs. To start with the latest, how many of us watched every moment of either or both grand finals, compared with how many of us actually attended the grounds? If...

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Digital disruption is stopping retail prices from rising

I’ve heard of the gap between perception and reality, but this is ridiculous. According to the experts, increased competition among supermarkets, department stores and other retailers is holding down prices in a way we’ve rarely seen before. This fits with the consumer price index, which showed prices rising by just 2.1 per cent over the year to June. Over the past three years, the annual increase has averaged even less: 1.8...

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Retailers affecting the economy in ways we don’t see

As uncomprehending punters complain of the soaring cost of living, and the better-versed ponder the puzzle of exceptionally weak increases in prices and wages, don't forget to allow for the strange things happening in retailing. It's a point the Reserve Bank's been making for months without it entering our collective consciousness the way it should have. The debate over the cause of weak price and wage growth has been characterised...

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Tough times restore productivity performance

It's official: Australia's rate of improvement in the productivity of labour returned to normal during the reign of Julia Gillard. How is that possible when big business was so dissatisfied and uncomfortable during Gillard's time as prime minister? The latter explains the former. According to figures in a speech by Reserve Bank governor Glenn Stevens last week, labour productivity in all industries improved at an annual...

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Clear signs the economy is picking up

At last some good news on the economy. This week's national accounts for the December quarter show the economy speeding up and, in the process, starting its fabled "transition" away from being driven largely by mining investment. The economy's medium-term "trend" rate of growth in real gross domestic product - the rate that holds unemployment constant - is thought to be 3 per cent a year. For much of last year the economy ...

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Pain hits business before it hits the budget

As we approach the budget next week we're hearing a lot about how the strangely weak growth in nominal gross domestic product has hit tax collections, particularly from company tax. But we're hearing a lot less about what this implies is happening to the "real" economy. What's causing nominal GDP to be so weak - weaker than real GDP - is that although the prices of our mineral exports have fallen a fair bit, the dollar hasn't...

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How what's hurting most is also what saved us

While many business people see the economy as badly performing and badly managed, our econocrats see it as having performed quite well and better than could have been expected. Why such radically different perspectives on the same economy? Partly because business people - particularly those from small businesses - view the economy from their own circumstances out: If I'm doing it tough, the economy must be stuffed. By contrast,...

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Why voters seen the economy as in bad shape

Despite last week's excitement, Julia Gillard's early announcement of the election date is unlikely to change much. It's certainly unlikely to change many voters' perceptions on a key election issue: her ability as an economic manager. It's long been clear from polling that the electorate doesn't regard the government as good at managing the economy. Why this should be so is a puzzle. As Gillard rightly claimed last week: "As...

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Why retailers aren't so greedy

When you buy something in a supermarket or a department store, how much of the price you pay is the store's mark-up? And of that mark-up, how much covers the store's costs and how much is clear profit? Everyone has their own answers to these questions. But I suspect most of those answers are based on vague impressions and long-held prejudices rather than hard evidence. When I was growing up we were always hearing about the depredations...

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The dots linking us to Europe's woes don't join

Humans are story-telling animals. We seek to understand developments in the world around us by turning them into ''narratives''. When several things happen in the same field, people - including journalists - have a tendency to turn them into a coherent story by stringing them together. For instance, the biggest economic news story for months has been the trouble the Europeans are having with their currency and high levels...

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Retail despair as consumers spurn goods for services

There's a bumper sticker that says: if you think money doesn't buy happiness, you don't know where to shop. It's just a joke. But there's actually a bit of science in it. Research by psychologists says buying stuff doesn't bring us as much satisfaction as buying experiences - such as a holiday or even a restaurant meal. Experiences are more satisfying than goods because they leave us with memories to think over (which we often...

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Baby boomers' wealth effect hits the retailers

Back in the early Noughties, when the property market was booming, a lot of baby boomers began contemplating their future and realised they hadn't saved nearly enough to allow them to continue in retirement the privileged lives they'd always enjoyed. They decided they'd have to start saving big time. So what did they do? Went out and bought a negatively geared investment property, of course. Their notion of saving was to borrow...

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Mouse is mightier than the stores

Well-mannered newspapers don't spend a lot of time talking about themselves. Even so, you've no doubt heard that the future of newspapers - though not news or journalism - is under great challenge from the arrival of the internet. Much classified advertising has moved to the net and now some display advertising is going. Some readers are moving to the net, smartphones and tablets such as the iPad. As you may imagine, these...

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We are watching our pennies, at last

Not so long ago people used to scandalise over the rate at which we were racking up credit card debt. Not any more. These days a new frugality is gripping us and credit card and other personal debt is growing at a snail's pace. Starting in the mid-1990s, our return to low inflation caused interest rates to fall sharply and oscillate around a much lower level - remember when the mortgage rate was up at 17 per cent? - and this...

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