A dip in retail spending does not mean the recovery has stalled.

On the contrary, it confirms the recovery is proceeding according to plan.

Back in August, the Reserve Bank of Australia (RBA) released its quarterly monetary policy statement.

In it, the central bank forecast the economy would grow by a half per cent over 2009.

According to the latest national accounts, gross domestic product (GDP) had already grown by exactly twice that amount by mid-year.

The brighter outlook built on that better performance to date should be evident in the next edition of the quarterly statement to be published by the RBA on Friday.
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Economists are growing more certain with every new data release that next Wednesday’s national accounts will confirm that the economy has been in recession since late last year.

But they say this won’t be an automatic trigger for another interest rate cut next week.

Data released on Thursday showed business investment dropped by its biggest margin in nearly 20 years during the first three months of 2009, while future spending plans have been cut back as the economic downturn takes holds.

The downturn in growth comes despite the federal government’s efforts to sure up the economy through household spending.
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A sharp jump in commercial finance commitments is an encouraging sign for the economy, even though it may turn out to be a flash in the pan.

Figures released by the Australian Bureau of Statistics on Thursday showed the value of commercial lending commitments jumped by $5.187 billion or 20.5 per cent, in seasonally adjusted terms, to a five-month high of $30.498 billion in March.

Within the total, approvals for fixed loans were $4.608 billion or 28.0 per cent higher at $21.080 billion, while revolving credit limit approvals were up by $580 million or 6.6 per cent at $9.417 billion.

The figures offer some encouragement as far as the economy is concerned.
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The federal government says it’s nothing more than “wild speculation” to suggest it could take almost 20 years to pay back the debt it’s currently accumulating to help cushion the Australian economy from the global financial crisis.

News Ltd has reported it will take 19 years to balance the national books if Labor runs a budget deficit of between $35 and $50 billion.

But Treasurer Wayne Swan says that analysis lacks credibility.
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Australians are using lower interest rates to repay debt instead of saddling up for more borrowings, a mortgage lender says.

Resi Mortgage head of consumer advocacy Lisa Montgomery said there had been an eight per cent increase in those wanting to consolidate debt, among the 700 customers surveyed about the future for their finances.

Since September, the Reserve Bank of Australia (RBA) has cut official interest rates by four percentage points to a 45-year low of 3.25 per cent, while banks have lowered their standard variable mortgage rate by an average 3.75 percentage points.
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Prime Minister Kevin Rudd has been encouraged that the strength of the Australian economy has been recognised by financial heavyweights, including the IMF, in the face of the global crisis during his visit to New York.

Although this week’s trip was initially to have focused on the United Nations General Assembly, it has coincided with the worst economic crisis the world has experienced in decades.

Mr Rudd spent the better part of his first day in New York in meetings with business and economic leaders, buoyed by their assessment of the state of the Australian economy.
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Prime Minister Kevin Rudd says the buck stops with him when it comes to the state of the Australian economy, but he has laid the blame on the opposition for a dramatic decline in consumer confidence.

“As prime minister of the country I accept responsibility for good news and bad news, and I will continue to do that,” he said.

“That is what political leadership is about.”
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A drop in unemployment and a pat on the back from the International Monetary Fund (IMF) are welcome news indeed, says federal Treasurer Wayne Swan, who remains “optimistic” about the economy.

The jobless rate unexpectedly fell to 4.2 per cent in June, as the number of people employed bounced back sharply, Australian Bureau of Statistics data released today shows.
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A new survey has found that the two most important factors for Australian consumers to trust retail banks in a tightening economic environment are the banks’ ability to protect corporate assets and show respect for their customers, according to the Unisys Trusted Enterprise research undertaken by the US-based Ponemon Institute. Full Story