Last week’s national accounts data dump for the September quarter was another kick in the teeth for Australian households.
Various measures of incomes revealed that Australian households have experienced near zero growth in real incomes over the past seven years.
First, real per capita wages & salaries nationally are 3.7% below their June 2012 peak:
Second, real average employee compensation is 2.2% lower than its March 2012 peak:
Finally, real household disposable income per capita, which has been boosted by recent tax cuts, is only 0.2% higher than June 2012:
Whereas the average annual growth in real household disposable income per capita this decade (0.57%) is way below that experienced in the 1960s (2.30%), 1970s (1.82%), 1980s (0.91%), 1990s (1.32%), and 2000s (3.23%):
The stagnation in household incomes helps to explain why retail sales volumes have collapsed to the lowest level since the early-1990s recession, despite strong population growth:
New car sales have also collapsed:
As has overall household consumption growth:
In the absence of income growth, alongside already gargantuan household debt loads, there is little capacity for Australian households to continue increasing their spending.
These recession-like conditions will not turn around until income growth returns to Australia’s households.
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