This economics stuff is certainly perplexing. Just yesterday we were saying, “the drop in housing approvals is good news for the Reserve Bank, even though it’s bad news for home builders and renters.”
Then it was up to the retail trade figures, which were expected to show a small rise of perhaps 0.2% or 0.3%. But figures out this morning from the Australian Bureau of Statistics showed a 0.5% rise in March, in seasonally adjusted terms. That compared with a 0.1% drop in February and a revised flat figure in January.
Bad news on the face of it, but it is in fact qualified good news because of what drove the increase. Food retailing rose 1.7% (good news for the likes of Woolworths and Coles), as did household goods (good news for Harvey Norman, Bunnings etc), but the ABS said that all other industries had a fall in seasonally adjusted estimates.
A rise in food sales is OK (we’ve all got to eat), but the rise in household goods is a little more concerning. It covers floor coverings and furniture, consumer electronics, home hardware, domestic whitegoods and homewares, mobile phones and music.
There’s some good news here because prices for consumer electronics, mobiles etc are tending to fall because of the impact of the higher Australian dollar cutting import prices, and intense competition in telecommunications. But the RBA would have liked to have seen just food increase in March.
There probably won’t be a rate rise next Tuesday when the RBA board meets, but I reckon they would be a toey bunch around the boardroom table, especially as they still contemplate the strong March quarter CPI, and the boom in export income that is starting to appear from higher coal and iron ore prices.
tubulent international waters and deciding on Australia’s national security interests. Governments opposing debate because its ” unecessary” are governments doomed to great mistakes. The great strength of liberal democracies, over the totalitarian states so beloved by the Left, are those states’ openness and freedom.
The RBA’s tracking of consumer demand and its impact on prices is understandable but what is absolutely mystifying is Treasurey’s refusal to release, under a FOI request, advice to the Rudd goverment on the impact of the abolition of AWAs on inflation. The official was quoted as saying that releasing such information would ” provoke unnecessary debate”.
One can only hope that the RBA has access to that information and that Wayne Swan will permit a debate, necessary or unnecessary, within the RBA’s board.
Combined with the complaints from 2020 participants that the final communiques issued at the end of many of the sessions bore no resmblance to what was actually discussed, but an uncanny resemblance to Labor Party policy , one begins to see that this is a government with little interest in reality but more the Real Politic.
That approach may get you through a Labor national conference but is positively dangerous if you’re trying to steer a national economy through..