The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Friday, March 18, 2011

Consumers start spending again...But for how long

Positive consumer spending data in February will face the March headwinds associated with blows to confidence dealt by the continuing Middle East crisis, the near-unprecedented nuclear cataclysm in Japan and tragic loss of life/activity in the world's third largest economy (with US authorities claiming overnight that it is all much worse than the Japanese government has been betraying), the carbon tax (cost of living) debate, and what might be thought of as a democratic (maybe despotic?) tax on petrol care of the MENA-induced oil price shocks. Combined with Australia's own natural disasters, the interest rate markets think this has mostly eliminated the chance of any future rate hikes, at least for the time being. With this in mind, here are the latest findings from CommSec:

"In line with anecdotal evidence, consumer spending strengthened in February. The Commonwealth Bank Business Sales Indicator (BSI) rose by 0.5 per cent in trend terms in February, ahead of a slightly smaller gain in January and the strongest result in 18 months. Of further encouragement only two of the 20 industry sectors recorded weaker sales in February, down from three sectors in January and four sectors in December. In seasonally adjusted terms the BSI rose by 0.4 per cent in February – the third gain in four months. The Commonwealth BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. The BSI covers spending broadly across the economy rather than just retail sales, including spending on automobiles, personal services and airlines. The BSI had consistently under-performed against the Australian Bureau of Statistics retail trade series over the past year but the period of under-performance appears to have come to an end."