Graphs: Unemployment Rate and Employed Persons: May 2012
Been a confusing week or rate two hasn't it?
We got an interest rate cut of 0.25%. Shane Oliver of AMP and Bill Evans of Westpac seemed to agree that there might be four, five, six or more interest rate cuts on the way, perhaps taking rates to below even where they were in the depths of the financial crisis misery of 2008-2009.
Then came the actual economic data...
Then we got the actual economic data.
Gross Domestic Product growing at 4.3%?! To put that in context, (strip out India, China and Brazil) Australia is still the envy of the developed world. The Eurozone has stagnated, the UK sliding into 'negative growth', the US going nowhere fast and high unemployment seemingly almost everywhere.
The unemployment data for Australia (above) was pretty convincing too, steady at just 5.1%.
Shares boomeranged back up yesterday on hopes that Spain might avert a financial disaster, and the Aussie dollar - almost unnoticed - has sneakily crept back up to 99.7 cents against the US dollar.
Is the data accurate? Look, I am a sceptic when it comes to the ABS (Australian Bureau of Statistics) and their ability to measure data in real time.
It's not necessarily their fault either. The data is reliant on the quality of the information they receive - and companies place a low importance on accurate, timely reporting to the ABS.
I know, because over the years I've supplied a lot of information to the ABS from ASX-listed companies myself. And no, it wasn't always timely or accurate.
Not because I didn't want it to be, the information can't always be collated quickly enough for quarterly reporting, and, frankly, ABS data is very low on a company's priority list - well behind adding value for the shareholders (and even behind keeping up supplies of Nespresso in the communal kitchen areas in many cases).
And, hey, the figures back me up on this. Why? Because the ABS often revises previously released figures. We have seen this with inflation and with GDP - Reserve Bank and economic policies respond accordingly and then the data changes later.
Take the long view
There is no easy solution to this - it is very difficult to measure masses of economic data accurately in real time - but I would suggest placing more importance on annual figures than the quarterly numbers released.
Farewelling the rather drizzly UK to fly back to Sydney. Flying Cathay Pacific (who I like) but no stopover this time - harsh. I hope the veggie meals on the plane come out first...