The Australian Bureau of Statistics (ABS) has released the June quarter National Accounts, which were an unmitigated disaster and confirmed that Australia is in a deep per capita recession.
The economy as measured by real GDP grew by only 0.2% in the September quarter, badly missing economists’ expectations of a 0.4% print:
Real per capita GDP has fallen for three of the past five quarters, with the March quarter revised up to flat.
Accordingly, GDP per capita fell 0.3% over the year.
The 0.2% growth in GDP was driven by increased government consumption and capital investment over the quarter.
By contrast, growth in both household consumption and GDP over 2023 slowed due to sustained cost of living pressures and higher interest rates.
As shown below, expenditure by households was dead flat over the September quarter and would have fallen by around 0.7% per capita:
Household consumption would have fallen even further had the savings rate not fallen to just 1.1%, which is the lowest level since December 2007:
The only positive is that labour productivity (GDP per hour worked) rebounded by 0.9% over the September quarter.
Otherwise, this result is a shocker and suggests the Australian economy has slowed more than expected, driven by crashing household consumption amid aggressive rate hikes and falling real wages.
It will be harder for the RBA to hike interest rates in February now.
