Saturday, March 4

An encouraging GDP print

In the September 2016 quarter GDP fell 0.5 per cent in seasonally adjusted terms. At the time there was breathless reporting about being on the edge of a recession. It was not my view and it was nice to see this confirmed with GDP growth of 1.1 per cent in the December quarter.

Perhaps the most important thing at the moment is that our terms of trade continues to improve, and remains well above the long term trend.

This is seeing substantial growth in Gross National Income (perhaps more directly relevant to our wealth than GDP).

Which of course begs the question, is the mining boom rebooting? Well in a way, the production phase just keeps rolling on.

But without the growth in construction.

Elsewhere in the economy, the taxpayer funded health care and social assistance sector is also booming.

And the manufacturing slump continues.

Not everything is gangbusters. Average wages, for example, are stagnant.

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