No worries, mate?
Never mind that exports, which have traditionally led the Australian economy, are sputtering hard due to the China slowdown.
And never mind subtle hints such as BHP Billiton chief Marius Kloppers saying he’s cutting coal mine expansion in Australia.
And never mind the fact that although industrial capacity utilization has been collapsing, Australian unemployment (inverted in the graph below) is only getting slightly worse—a combination that, judging by past performance (see the circled areas in the graph), can’t last long:
Nope, Aussies seem sure she’ll be right. For example, check out sales of new cars, breaking out to all-time highs.
What explains the divergence? Aussie economists don’t seem to know exactly. Of car sales, J.P. Morgan economists suggested that the strength of the Australian dollar might be helping a bit. But they couldn’t really see a good reason for the surge in car sales beyond that. They wrote:
There has not been any change in the way the statistics are collected, nor has there been an unusually high number of new models released, which often encourages sales. It seems simply that households are willing to put aside their anxiety about the rising jobless rate and concerns about sluggish growth in the global economy and take the plunge on a major purchase of a durable good.
One thing we do know is where they’re going in these new cars. Many are puttering over to their local McDonald’s to order up the global restaurant giant’s lamb sammies tailored specifically toward Australian tastes. McDonald’s executives spotlighted the performance of McLamb in their corporate conference call last week: “The Serious Lamb Burger and Serious Lamb Taster Wrap cater to Australian strong affinity for lamb with a premium high-quality product and we’ve seen a strong customer response.” Although to be fair, they did seem to think that Australians might not quite as euphoric as sales of lamb burgers and automobiles might suggest. “Consumer confidence is still fragile in Australia,” said Don Thompson, McDonald’s chief executive.
Oh, and thanks to the miracle of the internet, you can watch an actual Australian enjoying a McDonald’s lamb burger right here. Riveting stuff.