The Australian Bureau of Statistics launched the most recent – Australian Nationwide Accounts: Nationwide Revenue, Expenditure and Product, September 2025 – at the moment (December 3, 2025), which reveals that the Australian financial system slowed to 0.4 per cent (from 0.6 per cent) within the September-quarter 2025. On the present annual development price, unemployment is predicted to rise additional, given present labour power and productiveness development (see beneath). Family consumption expenditure development weakened whereas private and non-private funding was stronger. The 0.4 level general authorities contribution was the distinction between zero development and the constructive end result recorded.
The principle options of the Nationwide Accounts launch for the September-quarter 2025 have been (seasonally adjusted):
- Actual GDP elevated by 0.4 per cent for the quarter (0.6 per cent final quarter). The annual development price was 2.1 per cent (1.8 final quarter).
- GDP per capita was flat (+0.2 per cent final quarter) and 0.4 per cent for the 12 months.
- Australia’s Phrases of Commerce rose 0.3 per cent for the quarter and -0.2 per cent over the 12 month interval.
- Actual web nationwide disposable earnings, which is a broader measure of change in nationwide financial well-being, rose by 0.4 per cent for the quarter (0.5 final quarter) and a couple of.1 per cent over the 12 months (regular).
- The Family saving ratio (from disposable earnings) rose to six.4 per cent from 6 per cent.
- GDP per hour labored rise 0.2 per cent for the quarter (0.4 final quarter) and 0.8 per cent for the 12 months.
General development image – development price a lot stronger than in current previous
The ABS – Media Launch – stated that:
Australian gross home product (GDP) rose 0.4 per cent within the September quarter 2025 and a couple of.1 per cent in comparison with a 12 months in the past …
… Financial development was regular within the September quarter 2025. The rise this quarter matches the typical quarterly development for the reason that finish of the COVID‑19 Pandemic …
GDP per capita was flat for the quarter as financial development was consistent with inhabitants development however remained 0.4 per cent increased than a 12 months in the past ,,,
Personal funding contributed 0.5 share factors to GDP development within the September quarter … pushed by equipment and tools funding, which rose 7.6 per cent … displays the continuing expansions of knowledge centres. That is seemingly resulting from companies trying to assist development in synthetic intelligence and cloud computing capabilities …
Family spending rose 0.5 per cent within the September quarter following a 0.9 per cent rise within the June quarter.
Important spending was up 1.0 per cent, pushed by funds for banking and superannuation providers, electrical energy and well being.
Households shifted away from discretionary spending, down 0.2 per cent within the September quarter.
Public funding rose 3.0 per cent within the September quarter … with funding development in renewable vitality, water, telecommunications and rail transport tasks …
Web commerce detracted 0.1 share factors from GDP development, with imports up 1.5 per cent, and exports up 1.0 per cent …
The family saving to earnings ratio rose to six.4 per cent within the September quarter … Gross disposable earnings rose 1.7 per cent, sooner than the rise in nominal family spending of 1.4 per cent.
The brief story:
1. Family consumption expenditure development weakened whereas private and non-private funding was stronger..
2. The 0.4 level general authorities contribution was the distinction between zero development and the constructive end result recorded.
3. At this development price, the unemployment price is more likely to rise.
The following graph reveals the quarterly development during the last 5 years with the intense observations in the course of the worst a part of the COVID restrictions and authorities earnings assist taken out.
To place this into historic context, the following graph reveals the last decade common annual actual GDP development price for the reason that Sixties (the horizontal purple line is the typical for your entire interval (3.27 per cent) from the September-quarter 1960 to the September-quarter 2025.
Though COVID severely interrupted the financial system, as soon as we take out the quarters between March 2020 and March 2022 (inclusive), then the typical since 2020 has been 1.9 per cent each year – very mediocre.
Additionally it is apparent how far beneath historic developments the expansion efficiency of the final 2 many years have been because the fiscal surplus obsession has intensified on either side of politics.
Even with a large family credit score binge and a once-in-a-hundred-years mining increase that was pushed by stratospheric actions in our phrases of commerce, our actual GDP development has declined considerably beneath the long-term efficiency.
The Sixties was the final decade the place authorities maintained true full employment.
GDP per capita flat
Within the September-quarter 2025, GDP per capita grew by zero per cent (the purple arrow marks the spot!) – thus, actual GDP development matched the inhabitants development.
Whereas commentators deal with this statistics, the which means of the typical is questionable, given the extremely skewed earnings distribution in the direction of the highest finish.
What we will say is that if the typical is declining, then these on the backside are doing it very robust certainly.
The next graph of actual GDP per capita (which omits the pandemic restriction quarters between December-quarter 2020 and December-quarter 2021) tells the story.
Evaluation of Expenditure Parts
The next graph reveals the quarterly share development for the most important expenditure elements in actual phrases for the June-quarter 2025 (gray bars) and the September-quarter 2025 (blue bars).
- Family consumption expenditure development declined.
- Personal and public funding expenditure was stronger.
- Import development outstripped export development – so web exports was detrimental.
- Public consumption expenditure remained robust.
Contributions to development
The next bar graph reveals the contributions to actual GDP development (in share factors) for the principle expenditure classes. It compares the September-quarter 2025 contributions (blue bars) with the earlier quarter (grey bars).
- Family consumption expenditure added 0.3 factors (down from 0.4).
- Personal funding expenditure added 0.5 factors (up from zero).
- Web exports added zero factors (down from 0.2) – the 0.3 level export contribution outweighed the -0.3 factors import subtraction (keep in mind constructive import expenditure development constitutes a lack of development).
- General authorities contribution was 0.4 factors – the recurrent contribution (0.2 factors) including to the capital contraction (0.2 factors).
Materials residing requirements rose 0.4 factors within the September-quarter
The ABS inform us that:
A broader measure of change in nationwide financial well-being is Actual web nationwide disposable earnings. This measure adjusts the amount measure of GDP for the Phrases of commerce impact, Actual web incomes from abroad and Consumption of mounted capital.
Whereas actual GDP development (that’s, complete output produced in quantity phrases) rose by 0.4 per cent within the September-quarter, actual web nationwide disposable earnings development rose by 0.4 per cent.
How will we clarify that?
Reply: The phrases of commerce grew by 0.3 per cent within the September-quarter which complemented the rise in compensation of staff (COE) of 1.7 per cent.
Nevertheless, a number of the COE rise was dure to “will increase in redundancies … paid by the Monetary and Insurance coverage Sevice and Administrative and Assist Companies industries”.
Slight achieve in productiveness development
Actual GDP rose 0.4 per cent for the quarter, whereas the expansion in working hours was 0.3 per cent.
Which signifies that GDP per hour rose by 0.71 per cent for the 12 months.
That is the second consecutive quarter of labour productiveness development after three consecutive quarters of declining productiveness development.
The sectoral productiveness development was:
- Market sector – 1.0 per cent (annual), -0.1 per cent (quarter).
- Non-market sector – minus 0.3 per cent (annual), 0.3 per cent (quarter).
- General – 0.7 per cent (annual), 0.1 per cent (quarter).
The next graph presents quarterly development charges in actual GDP and hours labored utilizing the Nationwide Accounts information for the final 5 years to the September-quarter 2025.
To see the above graph from a distinct perspective, the following graph reveals the annual development in GDP per hour labored (labour productiveness) from the start of 2008 to the September-quarter 2025.
The horizontal purple line is the typical annual development for the reason that September-quarter 2008 (0.77 per cent), which itself is an understated measure of the long-term development development of round 1.5 per cent each year.
Family saving ratio improves by 0.4 factors
The RBA tried to wipe out the family saving buffers because it hiked rates of interest hoping that this would cut back the probability of recession.
After all, that course of attacked the lower-end of the wealth and earnings distribution, given the rising rates of interest have poured thousands and thousands into these with interest-rate delicate monetary belongings.
Households then turned cautious – lowering general expenditure development and growing their saving out of their disposable earnings.
Whereas family spending development outstripped the expansion in disposable earnings within the June-quarter 2025, the development to increased saving ratios returned within the September-quarter.
The next graph reveals the family saving ratio (% of disposable earnings) from the December-quarter 2000 to the present interval.
It reveals the interval main as much as the GFC, the place the credit score binge was in full swing and the saving ratio was detrimental to the rise in the course of the GFC after which the latest rise.
An growing saving ratio supplies the family sector general with an elevated capability to threat handle within the face of uncertainty.
The following graph reveals the saving ratio since 1960, which illustrates the way in which through which the neoliberal interval has squeezed family saving.
Going again to the pre-GFC interval, the family saving ratio was detrimental and consumption development was maintained by growing debt – which is an unsustainable technique on condition that family debt is so excessive.
Although the ratio has been rising barely in current quarters, it’s nonetheless properly beneath previous ranges.
The next desk reveals the impression of the neoliberal period on family saving. These patterns are replicated world wide and expose our economies to the specter of monetary crises rather more than in pre-neoliberal many years.
| Decade | Common Family Saving Ratio (% of disposable earnings) |
| Sixties | 13.9 |
| Nineteen Seventies | 16.0 |
| Eighties | 11.8 |
| Nineties | 4.8 |
| 2000s | 1.2 |
| 2010s | 6.2 |
| 2020s on | 8.7 |
| Since RBA hikes | 4.4 |
The distribution of nationwide earnings – wage share rose 0.1 level
The wage share in nationwide earnings rose 0.1 level to 54.2 per cent within the September-quarter 2025.
It hasn’t been that prime for the reason that September-quarter 2016.
The revenue share was regular on 27 per cent.
The residual is basically the federal government share.
The primary graph reveals the wage share in nationwide earnings whereas the second reveals the revenue share.
The declining share of wages traditionally is a product of neoliberalism and can in the end must be reversed if Australia is to get pleasure from sustainable rises in requirements of residing with out report ranges of family debt being relied on for consumption development.
Some disturbing arithmetic – unemployment goes to rise
The true GDP development price doesn’t relate to the labour market in any direct method.
The late Arthur Okun is known (amongst different issues) for estimating the connection that hyperlinks the share deviation in actual GDP development from potential to the share change within the unemployment price – the so-called Okun’s Legislation.
The algebra underlying this legislation could be manipulated to estimate the evolution of the unemployment price based mostly on actual output forecasts.
From Okun, we will relate the most important output and labour-force aggregates to kind expectations about modifications within the mixture unemployment price based mostly on output development charges.
A sequence of accounting identities underpins Okun’s Legislation and helps us, partially, to grasp why unemployment charges have risen.
Take the next output accounting assertion:
(1) Y = LP*(1-UR)LH
the place Y is actual GDP, LP is labour productiveness in individuals (that’s, actual output per unit of labour), H is the typical variety of hours labored per interval, UR is the mixture unemployment price, and L is the labour-force. So (1-UR) is the employment price, by definition.
Equation (1) simply tells us the apparent – that complete output produced in a interval is the same as complete labour enter [(1-UR)LH] occasions the quantity of output every unit of labour enter produces (LP).
Utilizing some easy calculus we will convert Equation (1) into an approximate dynamic equation expressing share development charges, which in flip, supplies a easy benchmark to estimate, for given labour-force and labour productiveness development charges, the rise in output required to realize a desired unemployment price.
Skipping the algebra, we arrive on the approximate rule of thumb:
If the unemployment price is to stay fixed, the speed of actual output development should equal the speed of development within the labour-force plus the expansion price in labour productiveness.
It’s an approximate relationship as a result of cyclical actions in labour productiveness (modifications in hoarding) and the labour-force participation charges can modify the relationships within the short-run. However it supplies affordable estimates of what occurs when actual output modifications.
The sum of labour power and productiveness development charges is known as the required actual GDP development price – required to maintain the unemployment price fixed.
Keep in mind that labour productiveness development (actual GDP per particular person employed) reduces the necessity for labour for a given actual GDP development price whereas labour power development provides staff that must be accommodated for by the actual GDP development (for a given productiveness development price).
So within the instance, the required actual GDP development price is 3 per cent each year and so the precise actual GDP development can be equal to this required actual GDP development price. In different phrases, the unemployment price will stay unchanged.
Unemployment would nonetheless be rising however the price of unemployment shall be fixed.
The present nationwide accounts and labour power information tells us that;
- Annual labour power development is round 1.9 per cent (averaged since 2000).
- Annual Labour productiveness development was 0.7 per cent within the September-quarter 2025.
- The required annual GDP development price is thus 2.6 per cent.
- Annual Actual GDP development was 2.1 per cent within the September-quarter 2025.
The info means that over the following 12 months the unemployment price will rise by round 0.5 factors on the present trajectory.
Conclusion
Keep in mind that the Nationwide Accounts information is three months previous – a rear-vision view – of what has handed and to make use of it to foretell future developments shouldn’t be simple.
The Australian financial system grew by 0.4 per cent within the September-quarter 2025 (down from 0.6 per cent) and by 2,1 per cent (up from 1.8) over the 12 months.
Family consumption expenditure development weakened whereas private and non-private funding was stronger.
The 0.4 level general authorities contribution was the distinction between zero development and the constructive end result recorded.
At this development price, the unemployment price is more likely to rise.
Clarification on terminology
I advocated a degrowth technique for the worldwide financial system general on condition that our footprint is 1.7 occasions the capability of the biosphere to regenerate.
To attain that technique, on condition that many poorer nations should proceed to develop, would require somewhat substantial minimize backs in spending and consumption within the richer nations.
Once I analyse the Nationwide Accounts information or any expenditure/output information, I write as if development is ‘good’.
However that terminology is used within the context that with out financial development and with none substantial shifts in earnings distribution and authorities transition insurance policies, making an attempt to pursue a recessionary technique would injury the weakest members of our society disproportionately.
In some respects, I’m abstracting from the damaging actuality of our ecological footprint.
That’s sufficient for at the moment!
(c) Copyright 2025 William Mitchell. All Rights Reserved.
