But there is a reasonable conclusion to this. While employee earnings have fallen, household incomes have risen as the stimulus measures were used by state and federal governments to get people to spend.
In many cases, however, it appears they haven’t. The money given in handouts has simply been stashed away for the inevitable bad times ahead.
Two separate reports have shown spending in some areas of the retail sector to have slumped while in others a mini-boom has emerged.
A Deloitte Access Economics report found that while there had been a collapse in spending early in the pandemic, spending has picked up significantly with the July figure showing a boost of 12 per cent on the same period last year.
The states are showing a wildly varying performance depending on the level of restrictions as are the various sectors of the retail industry with restaurants and cafes down 20 per cent in July while alcohol sales have boomed along with gains of 30 per cent or more in electrical, electronics, hardware and building and garden supplies.
“The level of cash washing though the economy from the financial stimulus is also unprecedented,” according to Deloitte’s David Rumbens.
The Westpac Consumer Sentiment index has also shown a rebound of 18 per cent this month and it now sits just 1.6 per cent below its pre-Covid level.
While the Deloitte report was forecasting a booming growth in spending in Queensland of 9 per cent next year, the Westpac Consumer Sentiment index showed that confidence is not yet apparent in the state with a fall of 8.1 per cent in its sentiment. Westpac said this indicated the public still had concerns of another breakout of the coronavirus, even though there was no sign of that happening in Queensland.
However, Queensland’s sentiment is still 2.1 per cent above its June level.
“There is still an extreme nervousness about the near term economic outlook,” Westpac chief economist Bill Evans said.
He said the Westpac survey found there was a 42 per cent recall from respondents to an economic news story in the past month, the highest proportion in almost nine years.
However, 70 per cent of the respondents assessed political news of the past month to be favourable while sentiment around unemployment improved almost 15 per cent in September.