Trying to get a handle on what is going on in the economy is not easy as I discussed recently in my show about retail turnover which when adjusted for inflation is falling and falling hard.
So no great surprise to see that the latest data from the ABS on household spending growth showed that it had slowed. It was up 0.1 percent over the year. The 0.1 percent rise in May follows a two point two percent increase in the 12 months to April.
So this weak data might at one level be seen as an indicator which suggests that a further RBA rate hike is not needed as the tightening is now showing.
But of course the various tax cuts and other government support flowing from 1st July 2024 which is worth at least twenty billion dollars could well boost household spending.
At very least it does appear that the government and the RBA are pulling in different directions in what Tarric Brooker has coined as Burnout economics I love the smell of burnout in the morning!
