The economic equivalent of hiding under the table

KJT says:

01:36pm | 09/07/09

The Indonesians were here before the Aboriginals, so maybe it is their rock.
Is this what “sorry” has done??

Pat says:

01:37pm | 09/07/09

“The crystal ball-gazers say it’s heading for around 8 per cent. Clive also pointed out recently that economists’ predictions are often useless and change tack with the economic winds.”

That’s for sure. The same economists who are gazing into the future for us today are the same geniuses who back in 2007 looked to the horizon and said “nothing but calm waters ahead”

Paul says:

01:48pm | 09/07/09

Paul the ABS statistics actually show 1.8 million unemployed - alot of people not spending mate! Where did this curious 5.8% spin figure come from?

Nathan says:

02:05pm | 09/07/09

If unemployment hits 8% I will eat one of Nate Myles’ best. It won’t happen. What will happen is a tightening of opportunities as companies work to retain staff they already have. The last thing they will want is to be caught out as short-staffed when the economy heats up again and the ‘skills-shortage’ strikes becomes an issue.

Kat B says:

02:24pm | 09/07/09

“Gentleman, you have come sixty days too late. The depression is over.” - Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930
http://www.debtdeflation.com/blogs/2009/07/04/debtwatch-36-july-2009-its-the-deleveraging-stupid/

There is more to come.

Overflow says:

02:29pm | 09/07/09

The hidden stories in these figures are the thousands of small businesses that are demonstrating how they want to keep staff and not sack them at the first sign of trouble and the willingness of employees to alter conditions to suit the conditions. The exact opposite of what was predicted would happen under Work Choices.  The true test if the new IR laws will be how fast the unemployment drops when the economy starts to grow again.

David C says:

02:46pm | 09/07/09

Some interesting comments here, those figures tell me businesses are now shedding jobs. They have switched as many to part time as they can and are now cutting.
Part time people spend less and unemployed spend very little, where does everyone think the pick up wil come from??? Be careful on basing all your hope (over substance) on China.
We are in the early stages of a very large global deleveraging, from ordinary folk who are consuming less and saving more/ paying down debt to corporates who are issuing equity to pay back debt (dilutive) to banks who are not lending to anyone. This will take a while and the issue will be how will will avoid becoming like Japan. Kevvy and SWanny can only spend/waste so much.

Frederick Van Dorestien, Wellington, NZ says:

02:53pm | 09/07/09

The economists should be watching international statistics more as the global situation does have a distinct effect on the economies of Australia and New Zealand.  If they are close to God they aught to pray that the EU group of countries does not descend into a Deflation Spiral.  These countries are currently tipping over into Deflation (0.2%) and if the USA follows the possibilities of a downward spiral are real.  If that happens a full blown Global Depression will follow cutting the First World growth prospects to pieces.

Overflow says:

03:38pm | 09/07/09

@ David C, agree with the basis of your comments that this could be the start of the shedding due to the “sugar hit” stimulus packages starting to run out.  I am very interested when I hear people contiually base their hope on recovery on China.  China is an export based economy, it needs the US and Europe to buy imports in order for it to grow as most of its own peoples are still peasants with little discretionary income.  If the US in particular does not improve (signs are it’s not) China will not grow, if China doesn’t grow neither wil Oz and there goes Swannies budget projections.  Welcome to higher inflation, taxes and interest rates.

E.Blair says:

03:44pm | 09/07/09

While the unemployment figure only rose one percent to 5.8%, the economy shedding some 21,400 jobs, the participation rate fell from 65.5% to 65.3%, which means that 42,800 people who where unemployed left the labour market, thus leading to a distortion of the figures. The increase in unemployment is much larger than the figures are letting on, all you really have do is find the differance between where the participation rate was twelve months ago and where it is now, and add that onto the unemployment rate.

richard says:

04:04pm | 09/07/09

If all the economic commentators were sent on a holiday for 6 months and forbidden to discuss all economic issues, the economy would immediately start improving substantially.

Steve B says:

05:43pm | 09/07/09

China is already starting to devest itself of US debt and has stopped buying long and mid term US government bonds, the international credit markets are going to be completely dominated by government borrowing as literally Trillions of dollars are sucked up by ‘stimulus’ packages around the globe. Interest rates cannot possibly stay at record lows at the same time that record levels of borrowing take place and there are an awful lot of young people who have been sucked into buying a hideously overpriced piece of real estate (by world standards). Our troubles haven’t even begun yet.

Jane says:

07:54pm | 09/07/09

i wonder if these stats are correct. the last time i remember last year was ruddy cut a large sum to ABS budget due to “inflation genie”. i didnt know ruddy reinstated the budget cut.

Paul G says:

11:53am | 10/07/09

@Overflow on China.
China is an export economy, however, the majority of its GDP (around 70% and growing) is now internally generated by internal demand. China has hit a point where it no longer needs to rely on Exports to the US to sustain growth - growth can be obtained purely from Chinese demand - exports are now their cream on top. The Chinese population as a whole still earns much less than the western world avg, however, the Chinese are getting richer by the year and India is following suit. It can now be argued that China is the biggest economy, since it is also virtually financing the US economy as the “bank to the US”. Don’t underestimate China’s ability to grow out of this without the need to export.

David C says:

12:51pm | 10/07/09

I think you will find US GDP is nearly twice as large as China (14.3 trio against 7.8). In fact US GDP is about the same size as China, Japan and India combined.
China is growing now primarily due to government stimulus, this won’t last forever.