So where’s the hair shirt brigade now, in light of the flat GDP number that emerged today? A rise of only 0.2% in seasonally-adjusted terms.

And non-farm GDP fell 0.2%.

A fall in exports – – 0.4% — was the biggest weakness. Household expenditure, rising 0.3%, kept the number above zero, along with a little help from private investment and the remnants of the stimulus program in public capital spending.

In fact the ABS notes that, in trend terms, construction has made as big a contribution to growth as mining over the last year. You can put that down to the Government’s stimulus package.

As you might have seen in the weekend press, a number of one-offs, like the pipeline effect of some big business capital expenditure, were expected to contribute to a flat or even negative number this morning. But the relative weakness of conditions outside the mining industry has been a looming issue for months — especially in retail and private construction, which has taken a hammering since the Government’s first home owners’ boost was removed at the start of the year. Last month’s unemployment numbers — universally agreed to have risen only because of the rise in the participation rate — also suggested some weakness in full-time employment, even in the resource states.

All of which presents a nice dilemma for the Opposition and the hairshirt brigade who have used the strength of the recovery to demand that the Government slash spending – although the Opposition and business won’t suggest the sort of cuts that would actually made a difference to both the quality of the budget and the fiscal outcome, like middle-class welfare. Given the Government is already aiming for the fastest recovery from deficit in history, how confident are they that the fall in non-farm GDP is just a one-off and the real economy is instead humming along and needs slashing and burning? Especially given yet another iteration of the GFC may well overtake Europe this winter?

The RBA might also be hoping that this is a mere “bump in the road”, to use Wayne Swan’s phrase, otherwise it might start to look like the Bank, along with our greedy banking cartel, have clubbed our two/three/pick-your-own-number speed economy with interest rate hikes in the face of apparent evidence from CPI, unemployment and national accounts figures that it isn’t the unstoppable machine we all seem to think it is.

In fact it’s in pretty much everyone’s interests to explain this number away as a blip, no matter which side of the political fence or where in business or government they sit. Let’s hope they’re right.