13 things to know about the Australian economy right now

Household spending continues to drive growth

1. Our economy grew 0.6 per cent during the September quarter of 2022, and 5.9 per cent compared to last year

This was the fourth consecutive quarter of growth since the COVID-19 Delta variant lockdowns.

Household consumption drove the increase, growing 1.1 per cent.

In fact, Australia's $2.2 trillion economy is 6.4 per cent larger than before the pandemic struck.

2. We spent more and saved less.

The household saving rate continued to fall reaching pre-pandemic levels.

The household saving-to-income ratio fell for the fourth consecutive quarter (from 8.3 per cent to 6.9 per cent) as increases in household spending outpaced household income growth.

Households saved 6.9 per cent of their income during the quarter, compared to 6.8 per cent in the December quarter of 2019.

This was despite a large increase in the compensation for employees.

"The household savings ratio continued to decline this quarter, moving towards pre COVID-19 pandemic levels. Higher levels of spending and increases in interest payable on dwellings detracted from household saving compared to the June quarter," Mr Crick said.

Source of chart: Australian Financial Review

3. Consumer prices rose 1.8 per cent during the September quarter of 2022 and 7.3 per cent compared to last year.

This was the fastest annual increase in CPI since 1990.

The major drivers of consumer price increases during the quarter were housing, gas and furniture.

4. Wage growth continued to trail inflation

..but showed signs of strengthening in response to tight labour market conditions.

The unemployment rate for the month of September was 3.5 per cent.

Compensation of employees rose 3.2 per cent, which was the highest quarterly rise since December quarter 2006.

Tight labour market conditions, with the unemployment rate being at a multi-decade low, and job vacancies at high levels, were key to the rise.

The Fair Work Commission’s 2021-22 minimum wage decision, and the increase in the superannuation guarantee (10.0 per cent to 10.5 per cent from 1 July 2022), also contributed to this growth

The private sector wage price index rose 1.2 per cent in the September quarter of 2022, the highest rate of growth since the September quarter of 2010.

Compared to a year ago, private sector wages rose 3.4 per cent, the highest annual rate of growth since the December quarter of 2012.

5. We continued re-engaging with the world.

In the first full quarter of relaxed international travel restrictions, spending on overseas trips grew 58 per cent.

International travel reached 56 per cent of pre-pandemic levels as holidays returned to our lives.

6. Airlines soared.

With pent-up demand, activity in the air transport industry rose 25.2 per cent.

The construction industry was strong on the back of major engineering and infrastructure projects and rose 2.3 per cent.

Coal mining activity has fallen for four quarters in a row.

7. Domestic mobility increased.

Household purchases of transport services rose 13.9 per cent, reaching 70 per cent of pre-pandemic levels.

We purchased more cars as supply bottlenecks began to ease and imports rose.

Catering and accommodation services also grew by a strong 5.5 per cent with increased tourism and mobility.

8. Our exports rode on the sheep’s back.

While wet weather hampered exports of coal, rural exports surged 9.8 per cent, led by wool and cotton.

Imports of communications equipment rose 5.7 per cent as new mobile phone models became available.

9. Exports were supercharged by lithium.

Our lithium concentrates exports reached a value of $3.4 billion this quarter and were up six-fold through the year.

Lithium has surged into Australia’s top 10 export commodities.

10. Private business investment rose 2.5 per cent led by an increase in infrastructure building.

Home-building activity rose 3.4 per cent following an uptick in building approvals, a moderation of labour and material shortages, and an improvement in weather conditions.

Government construction fell as quarantine facilities in Queensland and Western Australia was completed.

11. Profits of financial corporations rose 4.9 per cent during the quarter.

Rises in the cash rate during the quarter saw lenders tending to pass on rate increases on loans more quickly than on deposits.

This was the fastest growth in financial profits since the September quarter of 2008.

12. The current account returned to a deficit

...for the first time since the March quarter of 2019 as corporate profits went overseas.

Mining profits fell 7.1 per cent during the quarter due to weaker commodity prices.

Net trade detracted 0.2 percentage points from GDP, with a 2.7 per cent increase in exports offset by a 3.9 per cent rise in imports.

Exports rose for the second consecutive quarter, driven by both goods and services exports.

Rural goods (up 9.8 per cent) were the main contributor to goods exports, with increases in cotton and cereals.

Mineral ores increased strongly but this was offset by falls in both coal and other mineral fuels exports.

Exports of travel services grew 18.6 per cent, as International Education and Tourism continued to rebound after the re-opening of international borders, but was still approximately 50 per cent below its pre-pandemic level.

Imports rose strongly, driven by Travel services imports (up 58.0 per cent), as Australians travelled abroad.

Imports of travel services have been proportionally stronger than exports, with current levels recovering to approximately 56 per cent of those observed before the pandemic.

Increases in the imports of goods were driven by fuel and motor vehicles.