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More underwhelming economic data for the RBA to ponder - featured image

More underwhelming economic data for the RBA to ponder

The latest economic data released by the ABS has revealed a continuation of the underwhelming results reported since the RBA surprisingly increased official interest rates last month for the first time in over a decade.

The ABS revealed that GDP increased by a moderate 0.8% over the March quarter - well below the 3.3% increase reported over the previous December quarter and similar to the modest pre-pandemic rates.

Abs Gdp Seasonally Adjusted March Quarter 2022

The GDP data also revealed that household savings levels are continuing to fall with the savings ratio over the March quarter at 11.4% - down from the 13.4% recorded over the previous quarter and the lowest result over the Covid period.

Gross disposable income increased by 0.6% over the quarter with compensation to employees up by 1.8% – lower than the 2.0% recorded over the previous December quarter.

The latest GDP data adds to other modest results reported over recent weeks - disappointing ABS Wage Index growth, low employment growth and another fall in the participation rate - and will challenge the latest RBA assumptions on the frequency and level of rate rises as it manages the tricky business of reducing high inflation without creating a hard landing for the economy.

About Dr Andrew Wilson, Chief Economist of is widely regarded as Australia’s leading property economist.
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