MNI 5 Things: Australia GDP Slows But H'Hold Consumption Up

By Sophia Rodrigues

     SYDNEY (MNI) - The Australian Bureau of Statistics published the Q4 GDP

data Wednesday. Below are the five key observations we made:

     --GDP grew 0.4% q/q and 2.4%, lower than MNI median forecast but we noted

there was downside risk to the forecast. The outcome is also slightly lower than

the Reserve Bank of Australia's expectation.

     --Household consumption rose 1.0% q/q and follows an upward revision in Q3

consumption to +0.5%. Household consumption contributed a strong 0.6 point to Q4

GDP and was the biggest contributor. 

     --Household saving ratio was 2.7% in Q4 in seasonally adjusted terms, and

2.6% in trend terms. While the 2.7% rate is slightly higher than 2.5% in Q3,

household saving ratio has been steadily falling in recent years as households

have been making their consumption out of savings. 

     --Average compensation of employees was flat q/q even though compensation

of employees rose 1.1% q/q. The flat q/q outcome was due to strong growth in

employment during the quarter. Compensation has risen above 1.0% for the fourth

straight quarter and was up 4.8% y/y -- the strongest rate since Q2 of 2012. 

     --In nominal terms, GDP rose 0.8% q/q and 3.5% y/y. While this was higher

than Q3, the y/y growth slowed compared with +5.9% in Q3.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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