It’s a doomsayer’s delight: wages, houses and shares all falling and it’s beginning to spill into broader activity. Yesterday’s retail shocker was not a random event. It is telling us something very important about where the economy is and where it is going. It can be summed up in three words: households are dying.
There are two dead giveaways in the retail numbers. First, sales fell in all states suggesting firmly that there’s been a national psychological shift. Second, cafes and restaurant spending tumbled, with the three month moving average sagging to its lowest since the 2012 house price melt. It is the soft consumer dollar which is suddenly being saved (or has been stolen by the gas sector).
And is it any wonder? The three sources of household’s financial well-being are under simultaneous pressure with the only prospect being more downside. House prices are stalling and beginning to fall:
