ASX shares have just been handed a piece of economic news that may finally come as a relief.
The Australian economy grew 0.4% in the June quarter.
Annual growth came in at 2.1%.
Both figures were above what economists expected.
Stronger growth is good for company earnings and yet somewhat awkward for anyone hoping interest rates stay where they are.
Image source: Getty Images
What the GDP numbers actually said
The details are important here.
Household spending rose 0.4% in the June quarter, which is steady without being strong.
The household saving ratio edged up to 6.5% from 6.4%.
GDP per capita increased 0.8% across the 2025-26 financial year.
Grace Kim, the ABS head of national accounts, was measured about the result.
Economic growth remained subdued in the June quarter as households continued to behave cautiously. While increased spending and business investment occurred in pockets of the economy, imports supported much of the growth, moderating its contribution to overall GDP growth.
Why stronger growth is bad news for some ASX shares
The Reserve Bank has been waiting for evidence that the economy can absorb tighter policy, and this is it.
ANZ Group Holdings Ltd (ASX: ANZ) already expects the Reserve Bank to lift the cash rate by 25 basis points to 4.60% in November, citing persistent inflation and resilient household spending.
Australia's 10-year government bond yield has climbed to around 5.19%, its highest level in 15 years.
Higher discount rates compress the present value of every future dollar a company earns.
That is why long-duration ASX shares have struggled even as the growth data improved.
The banks are caught in the middle
Commonwealth Bank of Australia (ASX: CBA) is the clearest example of the tension.
A stronger economy means fewer bad loans, and CBA's 90-day arrears sit at just 0.73%.
A higher cash rate also widens deposit margins, which feeds directly into the 2.05% net interest margin reported in FY26.
The offset is credit growth, since home loan applications have fallen roughly 15% since the May Federal Budget.
At 24.36 times earnings and a 3.18% yield, very little of the good news is still available cheaply.
ANZ offers the same exposure on 19 times earnings with a 4.45% yield.
As a result of all of this, brokers unsurprisingly remain split on which of the major banks deserves to carry the sector premium from here.
Retail is where the real risk sits
JB Hi-Fi Ltd (ASX: JBH) is a slightly different narrative.
The company's FY26 revenue rose 4.8% to $11,064.0 million, and net profit after tax climbed 6% to $489.9 million.
The total ordinary dividend increased 22.5% to 337 cents per share.
JB Hi-Fi Australia and The Good Guys both recorded a slight dip in sales during July.
Consumer confidence fell 2.6 points to 74.9 in the latest ANZ-Roy Morgan survey.
A November rate rise would land directly on the mortgage holders who buy televisions and laptops.
Which ASX shares benefit from faster growth
Miners, energy producers and insurers all earn more when activity holds up and inflation runs a little warm.
The losers are the ASX shares valued on distant cash flows and the retailers most exposed to household budgets.
Foolish takeaway
A 0.4% quarter is not a boom.
However, it is more than enough to keep a November rate rise firmly on the table.
CBA looks fully priced for the good news, ANZ looks like better value on the same theme, and JB Hi-Fi looks cheap for understandable reasons.
I would not rebuild a portfolio around a single quarter of national accounts.
But I would take very seriously what the bond market is now saying about the cost of money.
