It is a step-down from the annualized rate of 2.8 per cent recorded in the third quarter, and weaker than market expectations.
March 6, 2018 – ABC
It also means that there was no acceleration from 2016, when GDP also grew at 2.4 per cent.
“Growth this quarter was driven by the household sector, with continued strength in household income matched by growth in household consumption,” Australian Bureau of Statistics chief economist Bruce Hockman said.
Household consumption rebounded to 1.0 per cent over the quarter propped up by higher discretionary spending in hotels, cafes and restaurants and recreation and culture.
The big drags on growth were net exports — particularly in rural goods and tourism — while residential construction and a sharp fall in larger scale engineering and construction took their toll.
Mr. Hockman said a 1.1 per cent increase in employee compensation was a “solid” result.
“The increase in wages is consistent with stronger employment data reported in Labour Force, as well as a lift in the growth rate in the wage price index observed over the past two quarters,” Mr. Hockman said.
However, wage growth was slower than the 1.2 per cent recorded in the third quarter, while average compensation per employee — which takes population growth out of the equation — fell to zero over the quarter, the worst performance in two years.
Treasurer Scott Morrison said the figures showed 2017 was “the year of jobs” and provided reasons to be optimistic about the economy.
“Today’s national account reveals the continued resilience of Australia’s domestic economy, with Australians backing themselves, getting jobs, spending more and investing more, particularly where it matters in our economy,” Mr. Morrison said.
He said the fourth-quarter results were in line with forecasts provided late last year in Treasury’s Mid-Year Economic and Fiscal Outlook.
Mr. Morrison said consumers were now more confident and household consumption was the strongest December quarter since 2010.
“Through the year, consumption growth was up almost 3 per cent at 2.9 per cent, and that reflects the growth in consumer confidence that we have been seeing now for some time,” he said.
Mr. Morrison defended the low wage growth outcome, saying while there had been improvements, more needed to be done.
“But it would not be true to say that that growth in what people have got paid, the total wages bill, was not driven in part, or at least was by one-third over the last year, I stress — over the last year — was driven by changes in average wages,” he said.