Let’s get some things in perspective.

Yesterday Australians lost an estimated $137 million on the Melbourne Cup. That works out at just over $6 for each Australian, or around $13 for each adult. Just roughly.

Yesterday the Reserve Bank lifted interest rates for a second time in two months, again by 0.25%. On a $300,000 mortgage, the cost is an extra $48 a month, give or take a few cents. That’s $6 extra week, or roughly what we spent yesterday per head losing on the Cup.

Today, according to the Australian Bureau of Statistics, retail sales fell by 0.2% in September, which was a bit of a surprise.

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On an original basis, retail sales fell by around $126 million, to $19.0.30 billion from $19.156 billion in August. On a seasonally adjusted basis, the fall was smaller, down some $21 million to $19.719 billion from $19.753 billion in August. The seasonally adjusted fall is roughly $1 for each Australian in September.

The original figure is the more important because I have never met a retailer, or a TAB who will allow me to pay or bet in seasonally adjusted dollars. Funny that!

So the upshot is that we spent more money losing yesterday than we did in cutting our spending in the shops in September.

To me that says the GFC is all behind us. We are stimulated; to punt, not to ship, it seems.

I know there’s an offset: we had to pay for the frocks, lingerie, suits, funny hats, limos, bubble, prawns etc that we wore, drank and ate yesterday around the country and that could help boost retail spending this month.

And it could, but then there’s another negative offset– the cost of all the office sweeps and other unofficial forms of punting that went on yesterday. Plus there’s the lost time as office parties degenerated and valuable time was lost at work and at play as people had sickies and worse.

Faced with doing the ‘right’ thing for our economy and either shopping or punting on the Cup, Australians go punting (and drinking, and eating and whatever else follows, especially among consenting adults).

On this basis I suppose we can now pencil in a positive month’s retail spending for November, which will be reported this time in January, or will the ABS ‘seasonally adjust’ the Cup out of its figuring?

The betting splurge yesterday made a nonsense of much of the reporting this morning on the interest rate rise. Much solemn discussion of the political, economic and business impact, and yet Australians watched the Cup in record numbers of TV, punted in record amounts and no doubt ate and drank to excess as well. Australians were not people yesterday worried about the second rate rise in as many months, and possibly more to come, or the fact there would be hangovers, physical and financially, today.

One such report in the News Ltd tabloids this morning seemed to be from another planet:

THE Reserve Bank’s campaign of rate increases will have major lifestyle consequences for families, putting second cars or private education beyond reach for many.

Homeowners are being urged to brace for as many as eight more rate rises after the RBA yesterday jacked up the official rate by 0.25 percentage points for the second month in a row.

Well, they could save a bit more by not punting or drinking on Cup Day.

But the same paper reported that “Victorian and NSW gamblers bet a record $95.6 million on the Melbourne Cup, up more than $7 million on last year.” and didn’t see the need for any explanation or the paradox.

The surprise fall in September’s retail sales however took some in the market by surprise. The Aussie dollar dropped half a cent, falling back under 90 US cents when the figures were issued as traders saw the fall as lessening the need for a rate rise in December.

But the ABS did point out that in volume terms, retail sales rose 1.4% in the September quarter, which tells us that we have now had four consecutive quarters of retail sales growth, which again emphasises the slightness of our slowdown, compared to the US and Europe where retail spending remains at or below the levels of a year ago.

Building approvals were more of the same: private housing up and a rise in non-private approvals.

The ABS said: ” The number of private sector house approvals rose for the eighth consecutive month, with a gain of 0.3% nationally. Both Western Australia (3.2%) and Victoria (2.4%) showed good growth in private sector house approvals, with Queensland (-5.4%) showing the largest fall.

“The seasonally adjusted estimate for total dwelling units approved rose 2.7% following a fall in the previous month. The seasonally adjusted estimate for private sector houses approved rose 0.3% and has risen for nine months. The seasonally adjusted estimate for private sector other dwellings approved rose 14.6% following a fall last month.”

Compared with September a year ago, private dwelling approvals are up 18.6% (and help explain the strong home lending going on, thanks to the first home buyers scheme), but no private dwelling approvals were down 11.3% in the year to September, thanks to the slow down in lending to investors and developers, which is only now starting to improve.

A December rate rise, unlike yesterday’s odds on punt, its at best even money, at the moment.

As a Crikey subscriber and someone who began working as a journalist in 1957, I am passionate about the importance of independent media like Crikey. I met a lot of Australians from many walks of life during my career and did my best to share their stories honestly and fairly with their fellow citizens.

And I never forgot how important it is to hold politicians to account. Crikey does that – something that is more important now than ever before in Australia.

North Stradbroke Island, QLD

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