Australian gross domestic product (GDP) grew by 0.6 per cent in the third quarter, slowing from the previous quarter when it rose 0.9 per cent, data from the Australian Bureau of Statistics showed.
The result just missed market forecasts of growth of 0.7 per cent for the quarter and nudged the local dollar down a quarter of a cent to $0.7580, the data showed on Wednesday.
The annual pace accelerated to 2.8 per cent, from 1.9 per cent and handily outpaced the United States at 2.3 per cent, according to Reuters.
The mixed outcome would be no surprise to the Reserve Bank of Australia (RBA) which only Tuesday kept interest rates steady at 1.5 per cent in anticipation of faster growth and a gradual revival in inflation.
Investors suspect policy will stay on hold for a long time to come and interbank futures are not fully priced for a hike until early 2019.
“If you can’t get a stronger consumer, it’s pretty difficult to get momentum going in GDP,” said Su-Lin Ong, Sydney-based chief economist at RBC Capital.
“For us, the key in the core of the economy is domestic demand and it’s hard to see how momentum picks up there when you’ve got so many challenges for both consumers and household,” Ong added.
Australian wage growth is crawling at the slowest rate ever, while the unemployment rate is still up around 5.5 per cent.
Indeed, household consumption rose just 0.1 per cent in the quarter, the smallest increase since late 2012.
Private investment rose 4.5 per cent last quarter, the largest gain in four years.