What Crikey’s Twitter followers tipped as this morning’s GDP figure in our poll. Oh dear:
In retrospect, expecting the Australian economy to continue growing in the face of the sort of sharp contractions seen in the United States, Japan, Korea and Europe was an act of optimism at a time when optimism can, it seems, safely be mothballed for a year or two.
It also seems the capacity of analysts, economists and commentators to accurately determine what is going on is no better than your average punter. Like most analysts, Crikey readers expected a small increase in GDP, doubtless influenced by yesterday’s positive news on exports. But it is only 48 hours since profit figures had led us all to believe a contraction was on the way. A lot like our friends in the stockmarket, we’re all jumping at shadows, over-reading every piece of data. The broader lesson might be to stop obsessing over the numbers. The most significant indicator is unemployment, which gives a sense of the human impact of the downturn. Joblessness has only marginally worsened in recent months, but it surely can’t resist the pull of economic gravity for much longer. That will give us a clear understanding of just how deep a hole we’re in.