GDP Centrepiece in Big Data Week


It was a big week this week with the release of GDP data. This data revealed the economy flexed its muscles to grow solidly, despite an Omicron wave and weather disruptions during the March quarter.  A consumer spending slash underscored the growth outcome in the quarter, so much so that the gain in consumer spending in the two quarters to the March quarter was the second fastest on record.

Spending growth in the quarter was led by the industries that have been at the coalface of closed borders and mobility restrictions, notably, transport services, which includes airline travel, hotels, cafes & restaurants and recreation & culture. Green shoots are emerging in these industries. Indeed, economic conditions across industries are converging, a theme that is likely to continue over the rest of this year as spending rotates back to services (and away from goods).

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Economic Insights - 3 June 2022
Inflation and rate hikes remain front of mind for households and businesses. This week, we received an update on how consumer and business confidence is faring in the face of strong inflation and the first increase in the cash rate in more than a decade.
This week, the Reserve Bank raised the official cash rate by 25 basis points from a record low of 0.1%. The cash rate now stands at 0.35%. This was the first hike since November 2010 and marks the beginning of the end of ultra-cheap money.
The Reserve Bank’s (RBA) April board meeting quickly regathered the attention of headlines last week. The RBA has turned a corner and has laid the groundwork for its first cash rate hike in over a decade, making the question of ‘when’ all the more important.


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