The NAB survey yesterday confirmed an economic pop.
The top business conditions indicator returned to +7, the same level as in June, after reversing the two-point drop that occurred in July.
At this point, the index is in line with its long-term average, indicating that companies believe the current state of affairs to be generally in line with past trends.
Profitability (+2 points to 4) and employment (+3 points to 5) were the two primary sub-indices that showed the most recovery, while the trading conditions index was steady at 12.
This is typical of a rate-cutting cycle with pent-up demand unleashed after three years of the Albo recession.
I do not expect it to remain this strong because Albo is also dropping an energy bomb on households as we speak.
More rate cuts will be needed to keep it running, but the rearview mirror RBA is likely to wait for the energy shock to pass.
