Australian households face tougher year as rates rise and US tech shares fall

Economist Leith van Onselen warned that Australians face a difficult year as higher interest rates, weaker house prices, job losses, fuel costs and persistent inflation put pressure on households. He argued that government spending is adding to demand while the Reserve Bank raises rates to bring it down, leaving ordinary households to bear much of the strain. He also cautioned that recent economic and policy changes could make conditions harder for some borrowers and workers.

US shares linked to artificial intelligence, including data centre and chip companies, suffered heavy losses, which could reduce Australians’ superannuation balances because funds invest in US stocks. Van Onselen said this would have limited effects on the wider economy unless markets crashed. He warned that unemployment could rise above 5 per cent next year, and said AI adoption, construction demand from data centres and a worsening fuel crisis could add to pressure on jobs and prices.