The Commonwealth Bank says that economy-wide spending through its vast network of merchant facilities rose 0.4% in trend terms during October, according to the latest update of the bank’s Business Sales Indicator (BSI).
CommSec Chief Economist Craig James said “the latest data paints a positive picture for Australian businesses as we move into the Christmas spending period, showing continued recovery in spending following uncertainty around Brexit and the Federal and US elections”.
James said spending is expanding “at faster than the average monthly rate over the past decade”.
But while the trend data is lifting there is a wrinkle in the seasonally adjusted sales data.
As background, I’ve never liked trend data when it comes to reporting economic statistics. That’s because I want to know what’s happening now and judge for changes in the economy compared to how it usually tracks through the different months and seasons of the year.
These cycles and seasons matter. And trend data by definition doesn’t allow me to do that.
So there is a hint of caution in the CBA data insofar as “the seasonally-adjusted measure of spending fell by 0.6 per cent in October after lifting by 0.4 per cent in September and lifting by 0.9 per cent in August,” the BSI showed.
But staying positive the BSI showed that “Across sectors, 13 of the 19 industry sectors rose in trend terms in October”.
“On a state basis “Growth was strongest in New South Wales, Western Australia and the Australian Capital Territory, and in industry sectors such as Amusement and Entertainment and Government Services,” the BSI showed.
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