Who would you believe? The Reserve Bank or high profile economic consultants Access Economics?

If you’d believed Access Economics, as many of its corporate clients did this year, you would have hunkered down for the mother of all financial crunches: David Jones did and sourced its gloomy statements on sales and earnings direct from Access. A month ago David Jones switched tack, revealing a surge in 4th quarter sales and upgrading earnings for the 2009 financial year.

But the Reserve Bank has taken a far more optimistic track: warning of a slowdown, but pointing to China and its impact on Australia.

The central bank cut rates by a record amount to their lowest level in 49 years, oil prices fell, cutting petrol prices and the much derided “cash splashes” worked, injecting money into retailing, saving some jobs, but more importantly lifting sentiment among consumers.

For the past few months the RBA has been sitting and watching the stimulus and rate cuts work their way through the economy. At the July meeting they sat tight again and the cash rate remained at 3 per cent.

Judging from the minutes of that meeting, released this morning, that’s it, no more rate rises unless needed.

Last night Access joined David Jones in telling us something we had already known for over a month, that Australia was on the way to dodging the worst of the crunch that Access had so fearlessly forecast at the start of the year.

Business confidence and conditions have joined consumer confidence, car sales (confirmed again today with another big month in June as a key tax break ended) retail sales and housing in soaking up the stimulus spending from the Federal Government and continuing solid exports, which continue to surprise analysts.

Now Access says there could be one more rate cuts, but rates will rise next year and in 2011. Well, that’s not rocket science and it’s probably a fairly safe bet, but judging from Access’ track record this year, it’s a bet you probably wouldn’t take.

But reading the minutes from the RBA board meeting, there’s now a stronger indication of central bank contentment at the way the economy has turned out. In fact, the list of developments given in the minutes reads like an economy in fine fettle.

It makes a mockery of the poorly-timed campaign launched Monday by the ACTU for a third stimulus package to target saving jobs (union members more likely). There is just no call for more spending from what Access and the Reserve bank have outlined.

“Recent information on the domestic economy suggested that economic activity was not as weak as had been expected. Exports had been surprisingly strong, which primarily reflected demand from China. Some mining companies and ports were reporting that they were again operating close to capacity,” the RBA minutes said.

Buried in the bank’s rhetoric is a sense of an economy in recovery mode, and not about to feel another lash from the slump in export earnings, as so many forecasters still believe. There’s the hint of a rate cut, if needed, but also the suggestion that the bank is coming to a view that one may not be needed, even if there’s a further slowdown.

And, the bank’s view of the economy received further backing this morning. Retailer Harvey Norman, which has struggled for most of the 12 months to June to drive sales growth, reported a 5 per cent rise in comparable store sales in the June quarter in its Australian stores. It joins David Jones and JB Hi-Fi in finally getting a boost from the stimulus spending.

And car sales rose sharply in June as one of the tax breaks from the stimulus spending came to an end. The Australian Bureau of Statistics said the seasonally adjusted estimate for total sales of new motor vehicles in June rose 5.7 per cent April to 80,330). That was after May’s rise of 5.4 per cent from April.