The Australian Bureau of Statistics (ABS) national accounts for the March quarter reported that the economy per capita is slipping into recession, with real GDP per capita falling by 0.1 per cent in the March quarter – the 10th decline in 15 quarters since Labor took power in mid-2022.
The Westpac-Melbourne Institute’s flagship index has been released, which indicates the likely pace of economic activity relative to the trend three to nine months into the future.
The six-month annualized growth rate fell further to -0.36 percent in June. “Quarterly GDP growth broadly consistent with flat stalling”.
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“Latest update points to further loss of momentum in Australian economy”, Westpac’s head of Australian macro forecasting Matthew Hasson said.
“The June update marks the sixth consecutive downward trend reading on the leading index growth rate and the weakest pace since late 2023, when quarterly GDP growth stopped flat”.
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“While the latest growth pulse is still not overly weak, it is broadly consistent with activity stalling by mid-year”.
“The analysis shows that conflict-related increases in fuel prices in March-April and RBA interest rate hikes in February, March and May are now weighing materially on growth, with the effects operating through different channels”, Hasan noted.
Meanwhile, as Justin Fabo from Antipodean Macro explained last week, the NAB employment index has fallen sharply, suggesting firms are laying off staff:
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We will receive the June labor force report from the ABS later this morning.
Regardless, the economy is slowing down, as one would expect given recent interest rate hikes and declining productivity.
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This suggests that Australia’s per capita recession will deepen.
