GDP: Australia's economic growth improves but disappoints the optimists

The RBA has kept the cash rate at a record low 1.5 per cent ahead of the crucial Christmas period

The RBA has kept the cash rate at a record low 1.5 per cent ahead of the crucial Christmas period

Wednesday's data from the Australian Bureau of Statistics showed the gross domestic product (GDP) grew by 0.6 percent in the third quarter, slowing from the previous quarter when it rose 0.9 percent.

Compensation of employees increased in all states and territories, resulting in a national quarterly growth of 1.2 percent and yearly growth of 3.0 percent.

Sign up here for free access to 7 articles per month + twice daily business email alerts.

Despite higher household income, household consumption was weak at 0.1 percent, in line with the retail trade estimates.

Morrison said the important thing to focus on was private investment, because its contribution to growth more than tripled in the quarter.

Indeed, household consumption rose just 0.1 percent in the quarter, the smallest increase since late 2012.

Guggenheim Capital LLC Lowered Nvidia Corp (NVDA) Position by $19.39 Million
Agf Invs Inc invested in 0.57% or 564,372 shares. 7,371 were accumulated by Carnegie Capital Asset Mgmt Ltd Liability Co. It dived, as 15 investors sold BHE shares while 66 reduced holdings. 99 funds opened positions while 370 raised stakes.

Treasurer Scott Morrison welcomed the acceleration in on-year growth, focusing on the jump in company spending.

"This is above the OECD (Organisation for Economic Co-operation and Development) average and puts Australia back up towards the top of the pack for major advanced economies around the world", he added.

Australian firms are experiencing the best trading conditions in 20 years, recording strong profits and adding full-time staff at a strong clip.

The ABS observed that 17 out of 20 industry sectors recorded growth this quarter, with professional, scientific and technical services leading the way, along with health care and social assistance, and manufacturing.

"The jobs market should remain strong, providing much-needed support to household incomes growth", he said.

Bill Evans, chief economist at Westpac, said pressure is building on consumers and it is forcing a change in spending patterns that threatens to choke off growth.

Why This Cheerleader's Mind-Blowing Invisible Box Stunt Is Sweeping the Internet
By keeping your foot perfectly angled on top of the invisible box while you hop, you can make it look like you're defying gravity. Other recent popular challenges include the " Ice Bucket Challenge ", " Planking Challenge" and the "Cinnamon Challenge".

The improved annual growth figure was assisted by the negative September quarter data from a year ago dropping out, and it takes Australia close to what would be considered average levels of economic expansion.

The third quarter saw big increases in electricity costs and more recent rises in fuel prices are also eating into any remaining slack consumers may have for additional spending.

Australia started its 27th year of unprecedented economic expansion, posting the strongest annual growth rate in 15 months.

Still, the government is betting on strong consumer spending to support stronger GDP growth and an improvement in its budget over time.

"It is probably too early to say that this is the beginning of a new trend, but given the unsavoury mix of headwinds facing the consumer at present, alarm bells should be ringing", Ms Auld said.

Foreign Trade Policy may focus on job creation, improving trade logistics
In addition, the validity period for duty credit scrips under MEIS has also been increased to two years from 18 months earlier. The mid-term review was supposed to take place around the time GST was implemented (July 1).

Latest News