Question

Go to the Australian Bureau of Statistics website and find the latest (December 2018)figures for output. In particular, find the percentage change in Trend GDP from the September Quarter 2018 to December Quarter 2018; and the December Quarter 2017 to December Quarter 2018; and the percentage change in Seasonally Adjusted GDP over the same two periods.b)Do the same for the December 2017 figures.(1mark)c)Explain whether, based on the GDP data and all else equal, you would prefer to be incumbent Government running for re-election this time last yearor now.d)Now find the ABS data for the Consumer Price Index, specifically report the figures for the December 2018 and December 2017 All Groups CPI and the Seasonally Adjusted CPI.(3marks)e)What are the categories that experienced the most significantprice rises and falls? Discuss whether, given your usual consumption bundle, you were likely better or worse off in December 2018 compared to September 2018.

Answer 1

The percentage change in Trend GDP from the september Quarter 2018 to december Quarter 2018 is 0.3%; and the december Quarter 2017 to december Quarter 2018 is 2.3%.

Likewise the seasonally adjusted GDP over the september quarter 2018 to december quarter 2018 is 0.2%; and the december Quarter 2017 to december Quarter 2018 is 2.3% itself.

b) The percentage change in Trend GDP from the september Quarter 2017 to december Quarter 2017 is 0.6%; and the december Quarter 2016 to december Quarter 2017 is 2.6%.

Likewise the seasonally adjusted GDP over the september quarter 2017 to december quarter 2017 is 0.4%; and the december Quarter 2016 to december Quarter 2017 is 2.4%.

c) Based on the GDP data and all else equal, we would prefer to be incumbent Government running for re-election this time last year. Because last year(2017) during december quarter the economy grew by 0.4% in seasonally adjusted chain volume terms. But the same now is 0.2%. But it should be noted at the same time the terms of trade has been increased by 3.1% now when compared to 1.0% of 2017. Still GDP is what we should consider and we choose the last year.

d) The percentage change in of all group CPI from september quarter 2018 to december quarter 2018 is 0.5% and percentage change in of all group CPI, seasonally adjusted for the same period is 0.4%.

The percentage change in of all group CPI from december Quarter 2017 to december Quarter 2018 is 1.8% and percentage change in of all group CPI, seasonally adjusted for the same period is 1.8%.

The percentage change in of all group CPI from september quarter 2017 to december quarter 2017 is 0.6% and percentage change in of all group CPI, seasonally adjusted for the same period is 0.6%.

The percentage change in of all group CPI from december Quarter 2016 to december Quarter 2017 is 1.9% and percentage change in of all group CPI, seasonally adjusted for the same period is 2.0%.

e) During december 2018 the alcohol and tobacco had a significant price rise of 6.8% and the health is the second highest category which had a 3.3 % rise. Education also had an increase of 2.7%. But communications is the category which had the highest fall, i.e. of -4.3%. During september 2018 the alcohol and tobacco had a significant price rise of 6.8% itself, but it is the transport sector which stood second in the price rise, i.e. 6.0% followed by the health at 3.2% and education by 2.8%. The communications had a fall of 4.3% itself during this period.

Given the usual consumption bundle the significant difference from september to december is only of transport category. During september the price of transport was significantly high. But during december this got reduced to 2.8%. This is a happy situation, since december being a peak month for transport due to holidays and all.Also while comparing with twelve months of september (1.9%) december is better with 1.8% price rise. That means it is likely to be better of during december when compared to september.