What is with bank economists?


John Peters, a senior economist at the Commonwealth Bank of Australia, was quoted this morning saying he thought consumers might not remain so cautious given unemployment was low, incomes were rising and household wealth had recovered from the global financial crisis.
That was his judgment on figures from the Australian Industry Group (AiG) and Commonwealth Bank performance of services index showing activity in Australia’s service sector contracted for a fifth straight month in September as firms cut back employment in the face of subdued consumer demand. The (PSI) fell 1.9 points to 45.6 in September, the lowest since July last year and further below the 50.0 threshold between growth and contraction.
Mr Peters seems to be very much in the camp of those who believe pain is good.

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