Australian GDP grew 0.3% in the second quarter according to a report released by the abs today, lower then forecasts of 0.4% by economists. That represents the lowest quarterly growth rate since the fourth quarter of 2004. The major highlight for me was that Household Consumption Expenditures were down for the first time in 15 years, dropping -0.1% in the June quarter.
Also this week we've seen separate reports on the manufactuing and services sectors. The Performance of Manufacturing Index registered a reading of 47 in August making it the third straight month of contraction.
On the back of today's data the Australian dollar continued to decline against other major currencies and the SFE futures market increased the likelihood of another 25 bps rate cut by the RBA in October to 88% up from 83% yesterday. The data continues to come in on the weak side and if that continues over the next few weeks another rate cut in October is looking more and more likely.