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Weak growth a test for confidence

Consumer and business confidence readings are released this week ahead of crucial employment figures on Thursday.

Minister for Finance Mathias Cormann
Consumer and business confidence readings are released this week ahead of crucial employment figures (AAP)

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Source: AAP


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As an election slogan, it lies in tatters.

But Finance MInister Mathias Cormann insists "jobs and growth remains very important".

Confidence readings this week will tell whether consumers agree the government is fulfilling its commitment.

Recent data suggests otherwise.

Last week the national accounts for the September quarter showed the economy went backwards for the first time since March 2011.

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At a 0.5 per cent contraction it was the worst outcome since the 2008-2009 global financial crisis.

Such weakness explains the subdued jobs growth in recent months.

But Senator Cormann does not anticipate a consecutive quarter of negative growth when the December quarter figures are released next year, which would constitute a technical recession.

As such, the government is not about to embark on a round stimulus spending when the mid-year budget review is handed down by Treasurer Scott Morrison on December 19.

Before then, November labour force figures are released on Thursday.

Economists at Commonwealth Bank are expecting at 15,000 rise in the number of people employed, but not by enough to lower the jobless late, which is expected to stay at 5.6 per cent for a third month in a row.

CBA calculates the average of the last three monthly results suggests jobs have been shed at a rate of 8600 a month and have averaged an increase of just 4300 a month over 2016 so far.

"These figures are weak," they say.

The report will also contain quarterly underemployment figures - people who want to work more hours, such as part-time workers.

As of August, the number of underemployed was 1.1 million or 8.7 per cent of the workforce, the highest level since this was first estimated in 1978.

Tuesday will see the latest weekly ANZ-Roy Morgan consumer confidence index, the first gauge to respond to last week's poor national accounts figures.

The monthly Westpac-Melbourne Institute consumer sentiment survey on Wednesday will also take into account the GDP figures, as well as Donald Trump's surprise US presidential election win.

National Australia Bank's monthly business survey for November will be released on Tuesday.


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