Australia's Economy Accelerates to 1%

Australia's economic growth accelerated in the Q3, driven by consumer spending and exports. GDP increased 1 percent from the Q2, when it rose a revised 0.7 percent.

The pickup in growth is evidence Australia's A$1 trillion ($870 billion) economy has so far ridden out the global credit slump as a three-decade-low jobless rate and rising wages drive household spending, and China's demand for commodities boosts profits for mining companies. Faster growth may also stoke inflation and prompt the central bank to raise interest rates by early next year.

Gross domestic product, rose 4.3 percent in the three months ended Sept. 30 from a year earlier, today's report showed.

The economy recorded its longest run of jobs growth in 12 years in the 12 months through October and the unemployment rate reached 4.2 percent in September, the lowest since 1974. Wages climbed 4.2 percent in the third quarter from a year earlier, matching the highest annual increase in at least a decade.

Household spending was the biggest contributor to third- quarter growth, rising 1.2 percent from the previous quarter, followed by exports, which gained 2.3 percent, today's report said.

Also stoking growth, residential construction climbed 1.6 percent in the third quarter from the previous three months and commercial building work jumped 7.6 percent.

Still, there are signs households and companies may trim spending in coming quarters as a U.S. housing recession and resulting credit-market slump threaten to slow global growth.

Australia, Bloomberg
12/4/2007 7:51:31 PM