Michael Blythe Quotations

Whether or not this consumer caution becomes a persistent theme in 2006 will depend to a large extent on labor market trends.

We are getting the investment we need to see. It continues the theme of rebalancing in the economy: slowing consumer spending and housing being replaced with stronger exports and investment.

We are getting the investment we need to see, ... It continues the theme of rebalancing in the economy: slowing consumer spending and housing being replaced with stronger exports and investment.

Signs of slowing growth and wages moving sideways rather than picking up, and of course the currency showing some signs of life, suggest that the Reserve Bank has probably administered enough monetary medicine for the time being.

Policymaker's toleration for inflation risks must be lower when the inflation rate is bumping around 3% per annum,

Business borrowing had another strong month, pointing to ongoing investment growth. Investment again looks set to support economic growth this quarter.

Building approvals have been volatile, but with this bounce, and other data like housing credit, it does look like the housing sector is near bottom after a very mild downturn.

Some of the risks coming through in the labor market in Australia are still very tight and, ultimately, you would expect that to push up wages and then flow through to inflation.

A difficult retail environment resulted in significant discounting, so lower prices for clothing, household appliances, tools and computing equipment are possible. A low CPI number obviously increases the odds on the Reserve Bank continuing to sit on the sidelines.

The most likely outcome is that interest rates will rise.

So we suspect that it won't take much to give the RBA that extra shove toward tightening.

There were new building regulations there that took effect from July 1 which are going to bump up the cost of new houses. It looks like there was a last minute rush to beat that which pumped up previous months and created this pothole for us to fall into in July,

It's on the side of the ledger for a tightening bias. But with uncertainty about global growth and oil prices, the bank isn't likely to move rates anytime soon.

Consumer caution was shaping up as the major domestic risk to the Australian economic outlook in 2006. Good labor market outcomes were always going to be the best antidote to this caution.

Consumer caution persists and a weak housing sector remains a drag on overall services sector activity.

Strong employment keeps alive the risks to wage inflation and the central bank's concerns.

It's confirmation the economy stepped down several gears in the second half of 2005. It is hard to be too pessimistic for the outlook for 2006, but it is one of those indicators that says there is no hurry to do anything on rates.

This is confirming that the Australian economy stepped down several gears in the second half of last year.

The continued improvement in services-sector activity is particularly impressive given the head winds restraining the consumer-related sectors.

Clearly, exports are the disappointment. Signs that at long last the exports story was coming through, has pretty much disappeared with this release.