Jawboning back in style as economy sinks

They are all at it.  The Treasurer.  The Reserve Bank.  And you can expect to hear a lot more of it.

Jawboning that is.  We haven’t heard that  word for a while.  But it’s right back in style now.

Jawboning, of course, is economists’ jargon for trying to talk up the economy, in bad times.

Some might see it as a mark of desperation.

But as regular readers know, the Reserve Bank’s assistant governor, Malcolm Edey, launched the season in Sydney yesterday, reminding business leaders that there are – apparently good -  reasons to expect that Australia will continue to perform better than most other countries  in the current global downturn.

Mr Edey also urged his audience to look for signs of improvement, including some that can already be seen.  He said these include  stimulatory measures, both here and abroad and the “normal cyclical dynamics.”

The Federal Treasurer, Wayne Swan, was just hours behind him.

He told reporters in Sydney that the latest retail sales figures show that the government’s economic stimulus packages are working.

Mr Swan pointed, in particular, to the 1.8 per cent growth the Statistician recorded in Australia’s retail sales over the December quarter.

That, of course, was on seasonally adjusted figures.

On trend figures, which the Bureau regards as more reliable, that growth was just 0.7 per cent.

In volume terms, which eliminate price effects, the picture was even more subdued.  Trend growth, on that measure, was just 0.3 per cent in the quarter, while seasonally adjusted figures showed 0.8 per cent growth.

The detailed figures were particularly interesting.

They showed that Australians continued to spend strongly on food, during the quarter, with supermarket sales rising  1.8 per cent.

But we are not eating out as much as we once did.  The nation’s cafes, restaurants and take away food bars all suffered reverses in the quarter.

So did Australia’s clothing and soft goods stores.

But Mr Swan wasn’t dealing with small stuff, like that.  His message was  firmly upbeat.

He pointed out that Australia is still doing much better than the United States, where retail sales plunged by 7 per cent in the December quarter.

“So this is a solid result,” the Treasurer said.

“And I think  it shows that our Economic Security Strategy has supported employment in Australia in this critical period.”

Not everywhere, of course.  Virgin Blue announced yesterday that it would be shedding 400 jobs.