The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, March 2023 – today (March 1, 2023), which shows that the Australian economy grew by just 0.2 per cent in the March-quarter 2023 and by 2.3 per cent over the 12 months. If we extend the March result out over the year then GDP will grow by 0.8 per cent, well below the rate required to keep unemployment from rising. Working hours dropped in the March-quarter and I expect that trend to accelerate in the coming quarters given the conduct of the central bank and treasury. The March-quarter result represents a significant decline in growth, Households cut back further on consumption expenditure while at the same time saving less relative to their disposable income in an effort to maintain consumption growth in the face of rising interest rates and temporary inflationary pressures. I expect growth to decline further and we will be left with rising unemployment and declining household wealth as a result of the RBA’s poor judgement.

The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, December 2022 – today (March 1, 2023), which shows that the Australian economy grew by 0.5 per cent in the December-quarter 2022 and by 2.7 per cent over the 12 months. This is a significant decline in growth, which is now insufficient to prevent unemployment from rising over the coming period. Growth is being driven largely by continued (but moderating) growth in household spending. This was augmented by the strong rebound in the Terms of Trade (commodity prices), which helped net exports make a positive growth contribution. There was growth in employee compensation (the wage measure from the national accounts) of 3.2 per cent but that was largely due to administrative decisions (for example, minimum wage increases) that impacted in this quarter rather than being the result of market pressures. Households are now saving less relative to their disposable income in an effort to maintain consumption growth in the face of rising interest rates and temporary inflationary pressures. I expect growth to decline further and we will be left with rising unemployment and declining household wealth as a result of the RBA’s poor judgement.

The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, September 2022 – today (December 7, 2022), which shows that the Australian economy grew by 0.6 per cent in the September-quarter 2022 and by 5.9 per cent over the 12 months to the end of September 2022. Growth is being driven largely by continued growth in household spending (which has not yet succumbed to the cost of living squeeze exacerbated by the interest rate rises). There was a modest contribution from private capital formation. The terms of trade declined sharply signalling a negative contribution from net exports and declining real net national living standards. There was growth in employee compensation (the wage measure from the national accounts) of 3.2 per cent but that was largely due to administrative decisions (for example, minimum wage increases) that impacted in this quarter rather than being the result of market pressures.

The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, June 2022 – today (September 7, 2022), which shows that the Australian economy grew by 0.9 per cent in the June-quarter 2022 and by 3.3 per cent over the 12 months to the end of June 2022. Growth is being driven by a combination of household spending (which has not yet succumbed to the cost of living squeeze exacerbated by the ridiculous interest rate rises) and a booming export sector (on the back of strong terms of trade). The problem is that while the on-going productivity growth has provided scope for non-inflationary real wage rises, real wages are going backwards. The problem is that business are pocketing these productivity gains as profits. The wage share fell further to a record low of 48.5 per cent which is a shocking testimony of the way the wages system is penalising workers. That needs to stop and the government should do something about it.

The Australian Bureau of Statistics released the latest version of – Private New Capital Expenditure and Expected Expenditure, Australia – today (May 26, 2022), which is part of several releases leading up to the publication of the June-quarter National Accounts next Wednesday. Today’s business investment data shows that private new capital expenditure in Australia fell by 0.3 per cent in the March quarter but was up by 2.2 per cent on the year. This is the second successive quarter in which business investment has fallen and it is likely the September-quarter will also record a contraction, which will all but wipe out the positive annualised result. This is the Australian business community at work – they are enjoying massive cuts to real wages for their workforces, record levels of profits, a rising profit share – and their investment performance is pathetic. There is some tension in the data though – as the expectation series indicates business investment growth over the next 12 months. I think that is overly optimistic given that household expenditure is likely to slow down with the rising interest rates and high energy prices really squeezing low-income families. One of the challenges facing the new Federal government is to somehow convince the business community to change their behaviour in this respect. Good luck with that. The way that the business sector has hijacked the ‘Jobs and Skills Summit’ agenda to turn it into a justification for more skilled migration – which will further dampen wages growth, push up unemployment, and further strain the almost impossible rental and home market – is evident that they are not for changing. And, if the new Treasurer keeps harping on about the $A1 trillion debt and the need to cut the fiscal deficit we will sink into recession.

The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, March 2022 – today (June 1, 2022), which shows that the Australian economy grew by 0.8 per cent in the March-quarter 2022 and by 3.3 per cent over the 12 months to the end of March 2022 – a decline in the growth rate. Nominal GDP grew by 10.2 per cent over the year and the change in the GDP price index (a measure of inflation) was 8.2 per cent. The data tells us that after the initial rebound from the lockdowns, growth moderated in the March-quarter and was driven by domestic demand – household consumption, government spending and inventory accumulation. The external sector undermined growth even though the terms of trade boomed. Productivity growth was strong but note working hours fell. The productivity growth provided scope for non-inflationary real wage rises. The problem is that business are pocketing these productivity gains as profits. That needs to stop and the government should do something about it. The wage share fell below 50 per cent which is a shocking testimony of the way the wages system is penalising workers.