Exports, retail sales join life in the fast lane

Thu, 06 Mar 2014  |  

The run of staggeringly good news on the economy continues to roll out.

Today it is a massive lift in retail sales growth – up 1.2 per cent in January and a stonking 9 per cent annualised growth pace over the past 6 months. Consumers are wealthy, with house prices and stocks adding close to $1 trillion to household wealth in the last two years. With high savings, consumers are spending up big.

Just wait until the labour market turns in the next few months and job creation and wages pick up. Retailers are in clover.

The only surprise is that so many people are surprised by these dynamics.

In the other news, the international trade data saw a massive lift in exports and a monthly trade surplus of $1.4 billion. While mining investment is falling away, mining exports are growing faster than an Ellen DeGeneres tweet at the Oscars. This trend is set to continue with the Chinese authorities forecasting GDP growth of 7.5 per cent in 2014 and the US, Eurozone and India all registering improving economic conditions.

The consequences are clear.

The RBA needs to hike interest rates are needs to do so very soon. A hike should have been talked about at this week's RBA meeting but the lethargy of the RBA to embrace new news has meant such a discussion is still likely a month or two away. Either way, rates should start increase in the not too distant future.

For the Australian dollar, it's back on board the path to parity. Global investors love triple-A, high yields, strong growth countries. Australia has that and the AUD will rise.

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The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

For many people, the cost of the fires is immeasurable. 

Or irrelevant. 

They have lost loved ones, precious possessions, businesses and dreams and for these people, what lies ahead is bleak.

Life has changed forever.

As the fires continue to ravage through huge tracts of land, destroying yet more houses, more property, incinerating livestock herds, hundreds of millions of wildlife, birds and burning millions of hectares of forests, it is important to think about the plans for what lies ahead.

The rebuilding task will be huge.

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