In his weekly Fairfax Media column Harold Mitchell, the former ad guru and now chair of Free TV Australia, went all upbeat. Under the headline “Forget Trump, the public are voting with their pockets” Mitchell is now an Australia bull:

“The Morgan research shows the overall picture of the Australian economy is healthy. She points to most indicators significantly improved on the same time last year. Inflation is down, GDP growth is up, the ASX 200 and Australian dollar are little changed and petrol prices are down. The ABS reports retail sales up 3.1 per cent in the year to September 2016. As for the fear that we will be overwhelmed by a Trump-inspired anti-globalisation wave, Michele [Levine of Roy Morgan] says a declining number of Australians agree with the statement ‘Globalisation brings more problems than it solves’. The figure was at 54 per cent, down from a high of more than 61 per cent in 2006 and also falling from 58 per cent in 2012.

“And people are shopping again. More retailers believe ‘the next 12 months is a good time to invest’; 66 per cent are of that view, well up from 58 per cent a year ago. Growth is also occurring in the leisure and entertainment sectors. Spending for the year has reached $77 billion, up from $69 billion last year. So the people are speaking with their spending. They seem to have grown tired of the negativity and put their hands in their pockets despite the predictions of a whole range of economic experts.”

Funny, then, that Mitchell either wasn’t told or didn’t realise that those solid retail sales figures — “up 3.1% in the year to September” — are actually a bit optimistic. The Bureau of Statistics trend figures show a rise of 2.8% in the year to September (the trend figures smooth out the volatility in the seasonally adjusted series and is therefore more accurate). And that is a very sharp slowdown from the 4% trend rate seen in the year to December 2015. That’s not to mention the most disturbing figure of the past few months — the weak 1.9% annual growth in wages in the September quarter’s Wage Price Index. Also apparently missing from his briefing was the worrying slowdown in new full-time jobs, and the rise in part-time work (which adds to the downward pressure on wages). Nor did his briefing apparently mention the black hole that is WA, the weaknesses in regional Queensland (outside the southeast of that state) and the sluggish performance of the South Australian and Northern Territory governments.

Peter Fray

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