Thursday, December 17, 2009
...the better they sleep at night"
- to further misquote a quote whose origins are already obscure
Tim Colebatch is blunt about Wednesday's September quarter growth figures which really tell us little more than that they don't make sense:
"I think the bureau is having trouble working out what is going on in the economy. The GDP figure it puts out is an average of three measures from different sets of data, covering expenditure, income and production. All year, all three of them have been having the loudest argument in the history of the national accounts.
The income and production data both show that Australia went into recession late last year, stayed there in the first half of this year, but accelerated into positive territory in September. But the expenditure measure tells a startlingly different story. It says we were booming in the first half of 2009, then slid back into recession in September.
To me, the story told by the first two makes sense. The third story is just barmy.
But the bureau has to average them out... and that's why it tells us growth slowed in the September quarter.
It's clear where the problem is. The expenditure figures confirm spending was in recession, but say all the damage fell on imports. They concede our export revenues also plunged, but estimate this is because average export prices fell 24 per cent in six months, and export volumes in fact rose in the middle of the deepest global recession for 70 years.
Common sense suggests that's wrong. More likely, the bureau has exaggerated the fall in export prices, and therefore overstated export volumes and growth. Our recession was probably deeper than its figures suggest, and our recovery from it is stronger."
. "If you throw enough money at a problem, some of it will stick". It has. We're back.
. "Something is very wrong with the GDP"
. Er, what is a recession anyway?