Bill Mitchell-en Nations heading south as austerity continues
(http://bilbo.economicoutlook.net/blog/?p=41504#more-41504)
(i) Berri txarrak ekonomian1
(ii) Europa hegorantz2
Segida3
(iii) Australia hegorantz ere4
The celebration of the fiscal balance heading to surplus which seems to have blinded the federal government to the reality will be short-lived.
(iv) Berri onak?
So isn’t a record trade surplus good news?
The ABS also released the latest – International Trade in Goods and Services, Australia, Dec 2018 – data yesterday (February 5, 2019) – with the headline:
Segida5
Which is why a currency union such as the Eurozone is crazy hanging out for export-led growth, while at the same time imposing fiscal austerity on the Member States and domestic demand suppression.
According to Eurostat analysis, intra-EU exports comprise around 65 per cent of total exports from the EU (and imports represent a similar proportion).
With that much dependence, austerity that kills domestic demand and import capacity also harms the export capacity of the partner Member States.
1 Ingelesez: “On the back of a decelerating inflation rate, Italy in recession, Germany not far behind, terrible PMI in Europe, Eurostat released the latest retail sales data yesterday (February 5, 2019) – Volume of retail trade down by 1.6% in euro area. Not good news. Remember all those Europhile Left reformers telling us that now was the time to reform the EU while the ‘sun was shining’. Well, its black clouds again and they didn’t get to first base in the reform basis. Lots of hot air – none of it got near disturbing the neoliberal austerity bias. But this austerity bias is not just a feature of the currency union. Yesterday, the Australian Bureau of Statistics released two data sets – Retail Trade and Balance of International Trade – and they both tell the same story. The interesting thing was that the trade data recorded a “record trade surplus” and I heard commentators actually claiming this was a great result. Wrong. Exports declined, but more slowly than imports. And imports declined because consumer spending and business investment was weak. Not a great result at all. At some point, the austerity bias around the world has to stop. But nations are heading south again in the meanwhile. With all that gloom, the best thing to do is enjoy my regular Wednesday music spot (if you like). And if you don’t like it, then maybe, appreciate the artistry of the musicians.”
2 Ingelesez: “Europe heading south
The Eurostat data shows that retail sales in the EU28 contracted by 1.4 per cent in December and have only grown 7.1 per cent in total since February 2008.
Retail sales in the Eurozone contracted by 1.6 per cent and have only grown by 2.3 per cent in total since February 2008. That is a massive austerity bias.
Even austerity-prone Britain has seen retail sales grow by 15 per cent since February 2008.
The following graph shows the evolution of retail sales since February 2008 for selected European aggregates.
The destruction of Greece is clear – retail sales are now 41 per cent lower than what they were in February 2008.”
3 Ingelesez: “Yesterday’s data shows that Belgian retail sales contracted 1.4 per cent (real terms) in December, German retail sales contracted 4.3 per cent, Estonia 2 per cent contraction, Spain 1.2 per cent contraction, France 0.1 per cent contraction, Latvia 1.2 per cent contraction, Lithuania -0.2, Slovenia -0.6, Slovakia -1.7 and Finland -0.3 per cent.
I am not suggesting we should evaluate well-being by retail sales growth although I would be foolish to consider such growth to be irrelevant to the advancement of well-being.
Other factors are clearly relevant including how the retail sales were funded. For example, in Britain’s case, household debt has risen sharply over the same period.”
4 Ingelesez: Australia heading south too
The ABS released the latest retail sales data for December 2018 yesterday (February 5, 2019) which showed that:
Australian retail turnover fell 0.4 per cent in December 2018,
One of the manifestations of the flat wages growth and the decline in consumption expenditure growth is the flat retail sales environment.
There are all sorts of anecdotal accounts of shopping strips being hollowed out in capital cities as major retails rationalise their exposure to the deteriorating situation.
Large department stores are recording poor results. Major brands (particularly clothing) are registering insolvencies.
The following graph show the quarterly monthly growth (blue bars) compared to the average monthly growth between January 2000 and December 2018 (red line).
The sharp dip in December is surprising (worrying) given this is a typically stronger month (xmas).
The November result was driven by the Black Friday promotion spree.”
5 Ingelesez: “Hmm, sounds like all systems go for an export-oriented nation.
Wrong.
The following graph tells the story.
Exports fell by less than imports is the reason the surplus rose.
The external environment tightened and exports fell by 1.6 per cent, while imports fell by a sharp 5.6 per cent as a result of harsher domestic conditions (flat wages growth, excessive household debt, savings rundown, etc).
Nothing to celebrate there.”
