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Macquarie thinks the RBA is 'puzzled' about a key measure of Australian household wealth
Australia’s household savings rate is at a 10-year low of 1%. It’s notable in the context of falling house prices and low wage growth — two threats to the outlook for domestic consumption, which itself makes up the biggest component of GDP. Interestingly, Australia’s most recent GDP report — which easily beat forecasts — was driven by a strong lift in consumer spending. But if Australians are digging further into their hip pocket to to maintain spending levels, it raises doubts about the outlook. However, Macquarie economists Justin Fabo and Rick Deverell think there may be more to the story. They started ... (full story)