If you’re in a gloomy mood, the Bureau of Statistics won’t be helping to pull you out of it. First it told us that wages across Australia grew at their lowest level on record, just 1.9 per cent, in the year to September. Now it tells us that, despite that unprecedented restraint, a net 70,000 full-time jobs were wiped out in the first ten months of 2016.
At first sight, these figures provide strong evidence that Australia’s economy is weakening, despite the welcome 3.1 per cent growth in the trend level of output (gross domestic product) over the year to June. But bear in mind that statistics are not the facts we sometimes take them for. They are either informed estimates, or survey data – and both are fallible. We’ll come back to this point later.
The figures certainly add to the signals troubling policy-makers. Growth in business credit has slowed sharply; indeed, business credit has grown just 0.6 per cent over the past five months, implying that business confidence is low. Retail sales volumes are up by just 0.2 per cent over the past six months, implying that consumer confidence is low.
Housing approvals are falling, admittedly from record levels. And while business investment (other than mining) is growing, and government investment is finally climbing off the floor, their combined impact is far outweighed by the massive decline in mining investment.
Moreover, despite the Reserve Bank’s efforts to drive the dollar down, it is higher now than it was a year ago, cutting off the gains we anticipated for exporters and import-competing industries, from education and tourism to manufacturing and agriculture.
(Read the full article at Inside Story)