In some sense, the September quarter national accounts don’t reveal much that wasn’t already known.
Private demand is weak, but apparent supply constraints (exemplified by ongoing languishing productivity) are a brake on how weakness in demand manifests itself in lower inflation.
That all said, there are some (very) tentative signs that private demand may be bottoming out. Household disposable income was assisted by the income tax cuts, albeit that much of that increase in disposable income found its way into household savings in the quarter. Nevertheless, household balance sheets are in better shape.
On productivity, some of the weakness can be attributed to employment growth being concentrated in the non-market sector together with declining mining output.
Read Stephen’s ‘On the other hand’ here
