By Peter Switzer
According to some feedback, a few followers are getting tired of my positivity around Donald Trump, so I’ll give it a rest and just hope Donald can resist his Trumpisms and, consequently, behaves like a US President who can deliver on the economic promises he has made.
Donald Trump, AAP
Let’s take stock of the latest readings on the Oz economy to see if the doomsday merchants will be wrong on the December quarter’s economic growth.
Recall the September quarter was a surprise negative. If we get two negative quarters, we end up in a technical recession. I’ve been betting we will grow in the December quarter and go on to break the world record of growth without a recession of 103 quarters held by the Dutch.
Let me bullet point the main stories on the economy to see if my optimism isn’t misplaced. Here goes:
- The average credit card balance rose by $76.40 to $3,149.00 in November, which suggests consumers started to spend more in the December quarter.
- Spending at hardware, building and garden suppliers was up by 10.2% in the 12 months to November – the fastest annual growth in 1½ years. This suggests we’re starting to renovate, big time.
- Retail trade rose by 0.2% in November, to be up 3.3% over the year.
- The ANZ/Roy Morgan consumer confidence rating surged to a four-month high, up by 5.9% to 120.1 in the week to January 8. Confidence is up 5.3% over the year, well above the average of 113 since 2014. All five components of the index rose in the latest week.
- Job vacancies rose by 2.2% to 182,000 in the three months to November – a 5-year high. Job vacancies are up 9% on a year ago.
- New dwelling approvals rose by 7% in November after sliding by 11.8% in October. It was only the second gain in the past seven months.
- Our trade balance improved by $2,362 million to a surplus of $1,243 million in November. It was the first monthly trade surplus in 33 months. The rolling 12-month deficit improved from $28.6 billion to $23.8 billion (the smallest deficit in 18 months).
- CommSec’s Craig James showed that “in October the number of passengers on the Sydney-Melbourne route was up by 1.1% on a year ago to a record 775,717. The Sydney-Melbourne route is one of the busiest air routes in the world. The Sydney-Melbourne route is also a key measure of business activity.”
- The Performance of Services index lifted by 6.6 points to 57.7 in December – marking the fastest pace of expansion since May 2007.
- In 2016, a total of 1,178,133 new vehicles were sold – a record for a calendar year.
- The CoreLogic Home Value Index of capital city homes surged by 1.4% in December and was up 10.9% over the year. Prices rose in five of the eight capital cities. Regional prices rose by 1.1% in November.
- The Performance of Manufacturing index rose by 1.2 points to 55.4 in December. A reading above 50.0 indicates that the sector is expanding.
I think you can see that there’s a pretty strong case for being positive, even if you can’t stand Donald Trump.
My point is that when you add the optimism he has brought to an already pretty good economic picture, you can see why I remain bullish on the economy and stocks.
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