GDP Final Consumption QoQ

Final consumption expenditure is spending on goods and services used to meet direct needs and wants. It is one expenditure part of gross domestic product measured by the expenditure approach, not a separate survey. It combines household spending (HFCE), by resident households at home and abroad including non-profits, and government spending (GFCE), net current outlays on services. The headline is quarter-on-quarter change, the change versus the previous 3 months, in seasonally adjusted chain volume measures, inflation-adjusted values with seasonal patterns removed.

Data cover the reference quarter, the 3 months ending in March, June, September or December. The Australian Bureau of Statistics, Australia's national statistics agency, releases results around 2 months after the quarter ends, on Wednesday at 11:30am Canberra time. Each release publishes the full national accounts, with output, spending and income splits, productivity, per-person output, prices, saving and state detail. Headlines appear as quarter-on-quarter percent change in seasonally adjusted chain volume, with contributions in points of GDP growth, and past quarters revise as data improve.

Spending shifts with household needs, prices and government services, so parts often move in different directions.

• Rent and energy: actual and imputed rents plus power and gas use; rents anchor the total while energy swings with weather.

• Food, tobacco, clothing and furnishings: groceries, drinks, legal tobacco, clothing and home equipment tracked through bank and retail data.

• Household services: health, volatile travel, communications, recreation, education, hotels and cafes, plus measured financial charges without full premiums.

• National defence: pay, operations and equipment use, excluding ships and aircraft counted as capital.

• National non-defence: federal agencies and universities, including in-kind health, drug and childcare benefits.

• State and local: schools, hospitals and police, the largest level inside government spending.

The June quarter of 2020, released 2 September 2020, shows why parts matter more than the total. Total final consumption fell 8.1% from the prior quarter, subtracting 6.1 points from a 7.0% fall in output. Households fell 12.1% and subtracted 6.7 points, while government rose 2.9% and added 0.6 points. Transport services fell 85.9%, hotels, cafes and restaurants fell 56.1% and health fell 20.2%, while alcoholic drinks rose 13.0% and furnishings rose 9.5%.

The lesson: the total hid a historic household collapse cushioned by government, with services down and home goods up.

1. Current-price household spending: build quarterly spending in cash terms from annual benchmarks plus indicators such as bank transactions and scanner data. Benchmarks rest on spending surveys and the census. Then add residents' spending abroad and subtract non-residents' spending at home.

1. Current-price government spending: add pay, in-kind benefits for households and other costs, then subtract sales and adjust for capital and service charges.

1. Volume: deflate each cash value with a matching price gauge to restate it in last year's prices. Use consumer prices for households and pay and producer costs for government.

1. Chain and seasonally adjust: combine parts with weights updated each year and link years into one series. Then remove regular seasonal patterns, tie estimates to annual totals and scale values to a reference year for dollar levels. Trend comes from averaging that revises the latest quarters.

1. Output identity: form output by adding consumption, fixed capital formation, inventories and valuables to exports minus imports.

1. Quarter-on-quarter rate: divide the change from the prior quarter by that quarter's level and multiply by 100. For example, household 300 and government 100 (total 400) become 303 and 100.5 (total 403.5). The total therefore grows 0.9% and adds about 0.6 points on output of 550.