The Bull

Monday 18

February, 2019 5:08 AM



Australian economy stalls as consumers spend less

Australian economy stalls as consumers spend less

Australia's economic growth stalled in the third-quarter of the year with consumer spending running out of steam as house prices fell further, official data showed Wednesday.

Share |

05.12.2018 05:08 PM

Australia's economic growth stalled in the third-quarter of the year with consumer spending running out of steam as house prices fell further, official data showed Wednesday.

The G20 economy grew a meagre 0.3 percent between July and September, the slowest rate in two years and far below market expectations.

The Australian dollar -- buoyed by 27-years straight growth -- slid against the US dollar on the news.

JP Morgan economist Tom Kennedy said the data came with "ominous" signs from Australian consumers.

"The consumer has outperformed relative to fundamentals for the past almost two years," he said.

"Now a combination of weak wages, slowing housing, limited wealth effect and high debt are really starting to culminate in a pretty ominous backdrop for household spending."

Australians spent less on big ticket items like cars and clothing, while spending on essentials like food increased very slightly.

Over the last year the Australian economy has expanded around 2.8 percent, trailing forecasts.

Australia's solid economic performance in the last few years had been a pillar of the ruling Liberal Party's appeal to voters ahead of elections expected next May.

Although the figures do not shatter that argument, it will raise doubts that make life more difficult for embattled Prime Minister Scott Morrison. 

The latest figures -- much weaker than the central bank's year-end forecast of 3.5 percent -- came a day after the Reserve Bank of Australia kept the interest rates on hold at a record-low of 1.50 percent.

Interest rates have remained unchanged since August 2016 as the central bank monitors the economy's rocky transition away from a massive mining investment boom.

Key risks that the Reserve Bank has been monitoring include soft wages growth and inflation, even as the labour market strengthens.

Market analysts expect the RBA to remain on hold until late 2019 or early 2020.
Archive
  • Trump to get update on China trade talks

    US duties on $US200 billion worth of Chinese imports are set to rise to 25 per cent from 10 per cent if no deal is reached by March 1 to address US demands

  • SA govt unveils Repat Hospital plan

    The South Australian government has unveiled its master plan to redevelop Adelaide's Repatriation Hospital.

  • US-China talks to boost Aussie market

    Australia's share market is tipped to open higher on Monday after optimism surrounding US and China trade talks.

  • The Week Ahead

    In Australia, the December quarter Wage Price Index release dominates the local agenda in the coming week.

  • ASX closes flat as more companies report

    The Australian sharemarket has managed to finish in positive territory as more companies reported earnings results.

  • Stocks to watch

    Stocks of interest at the close of trade on the ASX on Thursday, February 14.

  • Germany to let NATO use its cyber skills

    Germany is to join the ranks of NATO countries making its cyber warfare skills available to the alliance to help fight hacking and electronic warfare, officials said on Thursday.

  • Domain posts $156.4m loss as listings fall

    Domain's first-half loss has widened to $156.4 million after Sydney and Melbourne's stumbling property markets forced it to take a large non-cash impairment.

  • Farmer denies scaring vegans with gunshot

    A WA farmer who asked vegans to stop filming calves on his property and leave, then fired a shot into farmland, says he wasn't trying to scare them.

  • CommSec Daily Report Friday

    The local sharemarket is mostly flat so far in a choppy session of trade. The ASX 200 is marginally higher by 6 points or 0.1% to 6066 points towards lunch after trading in a narrow 18 point band...

Markets
Index: Points Change Percent

PLEASE SUPPORT OUR SPONSORS, AUSTRALIA'S LEADING BROKERS:



© Copyright TheBull.com.au. All rights reserved.