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Why it’s time to stop whinging about the economy

I get that times are tough for some without jobs, high mortgages and for retail businesses.

I also understand that things can always be better. Indeed, the continued innovation and growth is part of the secret sauce that makes capitalism so (imperfectly) successful.

But with that out of the way, it’s time for Australians to recognise just how good we have it. Namely, despite enormous international turmoil:

  • We have just finished a 21st consecutive year of GDP growth
  • Our unemployment rate remains in the low-5% range – and it’s been below 6% since August 2003. That compares with an average of 7.8% in the 25 years before that (which included two extended periods of over 10% unemployment. It even fell today, confounding the experts!
  • Inflation which remains consistently low, maintaining the purchasing power of our dollar
  • Official RBA interest rates that are lower than at any time in decades (with the brief exception of the ‘emergency rates’ in the wake of the Global Financial Crisis – and more than 10% below the extremely high rates of the early 1990s; and
  • Retail sales continue to grow (on trend estimates)

As a nation, we’re punch-drunk. We’re so shell-shocked by the seemingly constant stream of bad news, pessimism and fear that we’ve given up. Bear in mind, we’ve spent the last three years paying down mortgages, reducing credit card debts and building up our rainy day savings.

And despite that reduction in demand, the economy still looks good.

Yes, retailers are struggling, but retailing has always been a tough and cyclical business. Consumers have always looked for stores that most suit their needs, and nothing has changed.

Some retailers are struggling while others are continuing to grow strongly, yet the headlines and focus is just on those doing it tough.

The old adage suggests ‘whether you think you can, or think you can’t, you’re right’. While it’s a little simplistic, the reality is that our economic growth relies on consumer confidence.

And in that sense, whether we think we are going well, or think we’re struggling, we’re likely to be right. It’s time for us to wake up and realise how well our economy really is travelling.

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Scott Phillips is an investment analyst with The Motley Fool . The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691).

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