What the GDP figure really means

Today’s figure shows consumption increased by 0. 5 per cent in the June quarter, and by 2. 2 per cent over the last 12 months.

Retail sales figures (one component of consumption expenditure) were weak in the June quarter and that has had a big influence on the figure.

The ratio jumped to a 20-year high in 2008/09, hitting a seasonally adjusted 12. 9 per cent of household disposable income, but last year it slipped below 10 per cent, and it is now sitting around 9. 4 per cent.

The rise in inventories in the June quarter accounted for the large majority of the 0. 5 per cent growth in GDP overall.

Read more here: SMH


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