The Australian economy grew by a huge 3.1% in the December quarter of 2020, which beat economists’ expectations of a 2.5% lift. And our six-month growth rate has been the biggest surge in economic activity since quarterly records were kept back in 1959!

These statistical revelations mean that I have to ask: “Are we the best economy in the Western world?” I say the Western world because China always grows faster than most economies but you can hardly trust their data. And the way they’re behaving nowadays, who wants to compare themselves to those guys?

Let’s use the unemployment rate as a gauge of who’s coming back faster and stronger than others.

Australia Unemployment

Compared to the US, our jobless rate is 6.4% while the Yanks are at 6.3%. But at their worst, the unemployment rate there was a huge 14.8%! We topped out at 7.5%, so given you can’t trust statisticians when it comes to decimal points, I think we win over the US when it comes to how well we beat the threat to jobs from the Coronavirus.

US Unemployment

Meanwhile the poor old EU has had a shocker and the labour market story still looks terrible, with unemployment at 8.3%.

EU Unemployment

By the way, all these numbers are masked from reality because of government support programmes so the true story about who’s really out of work won’t show up for a few months.

We ‘dump’ JobKeeper at the end of this month so this huge six months worth of economic growth will be important in making sure the jobless rate doesn’t spike after March.

In reality, old economic stats like the unemployment rate isn’t as reliable for working out which economies are coming back faster than others. This is because of government interference into the labour market for good social protection reasons.

What I like is AMP Capital’s economic activity tracker numbers and charts (like the one above), which show how key indicators of an economy are actually performing, rebounding or regressing and getting back to normal. This chart above compares us to the EU and the US. You can see how strongly the blue line has been V-shaped while the US flattened out and lost its V after screwing up on the fight against the virus.

Meanwhile, Europe is heading for a W-shaped recovery but both of these latter economies will be saved by the vaccination programmes now being rolled out in earnest globally.

On our blue line, this is what AMP’s Shane Oliver observed: “Our Australian Economic Activity Tracker dipped a bit further over the last week largelyreflecting Victoria’s snap lockdown, but it remains relatively strong and is likely to resume its upswing as the lockdown is over and restrictions are being further eased. Our US Economic Activity Tracker surprisingly fell and our European Economic Activity Tracker rose slightly again over the last week but remains very weak.”

I know there’s a national debate about the unnecessary overreaction on the border closure issue from the Premiers of both WA and Queensland compared to NSW’s Glady’s Berejiklian. But the overall national record in beating the Coronavirus explains why our economic tracker looks miles better than any of the economies we compare ourselves to.

I suggest you think about how much better that V-shaped blue line would’ve looked if Victoria hadn’t produced the red line in the chart below.

This chart (and the economic activity tracker chart above) graphically shows how important the fight against the Coronavirus was for the economy and jobs. But also it makes you understand the effects of good and bad leadership from politicians and how leadership impacts real world economic outcomes.

Imagine what the nation’s death, unemployment and growth rates would’ve been if that red line was like those in the other states of Australia. Our total deaths were 909, of which Victoria recorded 820. Victoria’s death rate is a tragic 90% of the Australian total!