Australians have suffered their longest recession in modern history, with real per capita GDP declining for seven consecutive quarters as of Q3 2024.

This decline in per capita GDP has been driven by the household sector, where consumption fell for six of the past seven quarters.

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This week, the Australian Bureau of Statistics (ABS) has launched knowledge suggesting that the family recession could possibly be over.
Monday’s retail commerce launch from the ABS confirmed that actual per capita retail gross sales lifted by 0.4% in This fall 2024, which was the strongest development since Q1 2022.

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The retail commerce launch solely contains round 30-35% of family consumption. Subsequently, there was a query mark over how this end result will translate into the This fall nationwide accounts.
On Tuesday, the ABS launched its experimental Month-to-month Family Spending Indicator (MHSI), which contains round 68% of family consumption, as represented within the nationwide accounts.
The MHSI rose by 0.4% in December, with the annual fee rising to 4.3% from a revised 3.2% in November. The annual fee has additionally risen to the very best degree since March 2024.
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In quantity phrases, This fall 24 family spending was 1.4% increased year-on-year, up materially from 0.2% annual development in Q3 24.

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Month-to-month development additionally averaged 0.7% in This fall 2024, up from solely 0.1% in Q3 24.
The next chart from Justin Fabo from Antipodean Macro exhibits that the MHSI augurs properly for a rebound in family consumption within the This fall nationwide accounts.

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Certainly, CBA economist Harry Ottley has upgraded the financial institution’s forecast for family consumption from 0.4% in Q3 2024 to 0.7% in This fall 24.
On condition that Australia’s inhabitants probably grew by 0.5% in This fall 2024, this might counsel that the patron recession has completed.
That mentioned, Ottley cautioned that “heavy discounting within the quarter might have boosted spending greater than the underlying pulse of shopper momentum warrants. Our high-frequency spending knowledge (to 31-Jan) suggests momentum might ease in January”.
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“The timing and enlargement of discounting within the quarter and base results means it’s too early to be assured of a sustained upward development”, Ottley mentioned.
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