MNI BRIEF: Aussie Q2 GDP Grows 0.6% - National Accounts

Australia’s economy grew 0.6% q/q in Q2, 10 basis points above expectations and up from 0.3% in Q1, while unit labour costs rose 0.7%, according to National Accounts data released Wednesday by the Australian Bureau of Statistics.

GDP per hour worked, a measure of productivity, increased 0.3% q/q and 0.2% y/y.

“Economic growth rebounded in the June quarter following subdued growth in the March quarter, which was heavily impacted by weather events,” said Tom Lay, head of national accounts at the ABS.

Household spending rose 0.9% q/q, accelerating from +0.4% in Q1. Discretionary outlays led with a 1.4% gain, while essential spending increased 0.5%. “End of financial year sales and new product releases contributed to rises in discretionary spending on goods including furnishings and household equipment, motor vehicles, and recreation and culture goods,” Lay said.

Net trade added 0.1 percentage points to growth. Export gains were driven by goods, led by iron ore and LNG as production rebounded from March quarter weather disruptions. Services exports also rose, supported by short-term visitor arrivals, particularly family and friends reunions.

The Reserve Bank of Australia will likely cut the 3.6% cash rate again at its November meeting, according to former staffers. (See MNI: RBA November Cut Eyed, Lower Productivity To Pull Down R*)