Australia: GDP disappoints as consumer is hit by headwinds - Westpac

Elliot Clarke, Research Analyst at Westpac, points out that the Australian GDP growth printed just 0.3% for the September quarter, following a 0.9% gain in the June quarter, which resulted in slow down of annual growth from 3.1% (revised from 3.4%) to 2.8%.

Key Quotes

“The primary catalyst for this deceleration is the consumer, with consumption growth down from 0.9% in the June quarter to 0.3%. On both a six-month annualised and annual basis, consumer spending is decidedly below trend. Troublesome for the outlook, household incomes were weaker still, with real disposable income up just 1.0% over the past year.”

“From the RBA this week came two communications. Firstly on Tuesday, the tone of the December meeting decision statement remained constructive on the outlook, albeit while continuing to recognise uncertainty over the consumer and the potential negative effect of trade tensions on the global economy. On housing, their description was unchanged from November, citing conditions as having “continued to ease”.”