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It looks like spending in the Australian economy is rebounding
Topic Started: 20 Jan 2017, 09:42 AM (842 Views)
Rufus
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It looks like spending in the Australian economy is rebounding
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In what is a promising sign for the Australian economy after a less than stellar performance in the September quarter last year, economy-wide spending grew strongly in December, maintaining the positive momentum seen in recent months.

The Commonwealth Bank’s Business Sales Indicator (BSI) — a measure of spending on both goods and services that is obtained by tracking the value of credit and debit card transactions processed through its merchant facilities — increased by 0.7% in trend terms during December, leaving annual growth in sales at 5.4%, a nine-month high.

While the BSI only captures spending on cards processed through Commonwealth Bank terminals, as the largest retail bank in Australia, the results could be used to extrapolate broader spending patterns across the country.

Craig James, chief economist at Commsec, said that over the past four months, “monthly trend growth in spending has been between 0.7-0.8%, and above the 0.3% average monthly growth recorded for the first eight months of 2017”.
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So momentum in spending is accelerating, and it’s also broad based in nature, says James.

“At a sectoral level, 17 of the 19 industry sectors expanded in trend terms in December, a similar outcome to October and November,” he said, noting that sales also increased in seven of Australia’s eight states and territories over the same period.

While indicative of a broad improvement in spending levels across the country, James’ notes that sales in retail stores fell by 0.2% last month, a slightly concerning outcome after an underwhelming retail sales result for November.

However, while spending on retail goods was weak, that was more than offset by spending on services.
“One of the strongest gains occurred in business services, up 1.9% in December after a 2.3% increase in sales in November,” said James. “In the service providers sector, spending also rose by 1.9% in December after a 2.0% gain in November.”

That’s a pleasing result, especially as the BSI includes spending on both goods and services, making it comparable to household consumption expenditure in Australian GDP, according to James.

As the largest component within Australian GDP, the acceleration in spending seen in the BSI is an encouraging result after underwhelming growth in household consumption in the June and September quarters last year.

James’ certainly thinks so, suggesting that the economy is “accelerating out of a flat spot experienced in mid-2016”.

“That is clear from the BSI as well yesterday’s jobs data and surveys covering manufacturing and services sector,” he says. “The Reserve Bank would be heartened by the latest data, giving policymakers more reasons to stay on the interest rate sidelines.”

Australia’s December quarter GDP report will be released on Wednesday, March 1.
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Jon Snow
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Rufus
20 Jan 2017, 09:42 AM
It looks like spending in the Australian economy is rebounding
Link

In what is a promising sign for the Australian economy after a less than stellar performance in the September quarter last year, economy-wide spending grew strongly in December, maintaining the positive momentum seen in recent months.

Australia’s December quarter GDP report will be released on Wednesday, March 1.

Sales grew in December!!!! Nooooo!!!

Is there a holiday or something around that time?
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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herbie
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Jon Snow
20 Jan 2017, 08:47 PM

Sales grew in December!!!! Nooooo!!!

Is there a holiday or something around that time?
Fair enuff point I 'spose Jon?

But tha last few yrs (all tha way back ta 'since' tha GFC even?) would still seem like a bad time ta have bin a bear on either tha Sydney or Melbourne housing markets - Wif there being f*** all ways ta put lipstick on that pig if one woz ...

Like just sayin' like.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Jon Snow
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herbie
20 Jan 2017, 10:15 PM
Fair enuff point I 'spose Jon?

But tha last few yrs (all tha way back ta 'since' tha GFC even?) would still seem like a bad time ta have bin a bear on either tha Sydney or Melbourne housing markets - Wif there being f*** all ways ta put lipstick on that pig if one woz ...

Like just sayin' like.

Bad time for anyone who wasn't working for a bank really. Costs up, income down. Bull or bear, everyone gets screwed by a monopoly, except the monopolists of course.
Speak when you are angry and you will make the best speech you will ever regret.
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Trollie
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Jon Snow
20 Jan 2017, 08:47 PM

Sales grew in December!!!! Nooooo!!!

Is there a holiday or something around that time?
What happened to everyone being tapped out?
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