Luci Ellis: What's up (and down) with households?

Address by Ms Luci Ellis, Assistant Governor (Economic) of the Reserve Bank of Australia, to the Housing Industry Association March Industry Outlook Breakfast, Sydney, 26 March 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you to the organisers of this breakfast event for the opportunity to speak with you and share with you some of our thinking about current economic developments.

For a little while now, the team at the Bank has been grappling with how one might reconcile apparently weak national accounts figures with the noticeably stronger labour market data.

The disconnect can be traced to the household sector. Many other parts of the national accounts measure of output - gross domestic product (GDP) - are actually doing reasonably well. Outside the mining sector, where some large projects are still winding down, business investment is growing at a solid pace. Transport and renewable energy projects have been quite important. Public demand, both consumption and investment, is supporting growth.