4 Mar 2016
AUD: Australians more willing to spend - Westpac
David Goodman, Research Analyst at Westpac, notes that the Australia’s Q4 GDP data surprised to the upside and certainly gives RBA additional time to assess “whether the recent financial turbulence portends weaker global and domestic demand”.
Key Quotes
“Consumers were the key source of upside surprise, with spending increasing by 0.8%, following an upwardly revised 0.9% rise in Q3. Still consumption growth is best described modest, compounded by a backdrop of weak wages growth.
The improved consumer spending is coming despite gloomier wages figures and is being ‘funded’ by a sharp drop in household savings rate. The household savings ratio fell to a still relatively high 7.6% in Q4, down from 9.1% a year ago. While this has supported consumption and delivered an upside surprise to growth, it does raise some questions as to whether it will be sustained in 2016.”
Key Quotes
“Consumers were the key source of upside surprise, with spending increasing by 0.8%, following an upwardly revised 0.9% rise in Q3. Still consumption growth is best described modest, compounded by a backdrop of weak wages growth.
The improved consumer spending is coming despite gloomier wages figures and is being ‘funded’ by a sharp drop in household savings rate. The household savings ratio fell to a still relatively high 7.6% in Q4, down from 9.1% a year ago. While this has supported consumption and delivered an upside surprise to growth, it does raise some questions as to whether it will be sustained in 2016.”