Part 1 - Glossary

Gross Domestic Product (GDP)The total value of goods produced and services provided in a country during one year.Australia GDP is valued US$1.57 trillion (2012 GDP estimate)

Consumer spending patternsGoods and services bought by a household in satisfaction of their needs and wants. It includes nondurables such as food, semi-durables such as clothing and durables such as cars.

Inflation rateThe changes in the rate in prices of goods and services which is calculated using the Australia Consumer Price Index. Australians has an 2.7% inflation rate (2013 fourth quarterly)

Interest rateThe percentage of a sum of money charged for its use.Australia's official interest rate: 2.5 per cent

Unemployment rateThe percentage of the work force that is unemployed at any given date. December 2013: 5.8% rate

Consumer confidenceConsumer confidence is an economic indicator which measures the happiness of the consumers concerning the economy and personal financial situation.Over half (55%) of Australians believe the outlook for their personal finances over the next 12 months is good or excellent, a significant increase from 49 percent in Q1 2013.

The economy has continued to expand at a below-trend pace in the third-quarter of this year, with the annual growth rate at 2.3 per cent.

The economy grew a seasonally adjusted 0.6 per cent in the three months to September, after expanding by a revised 0.7 per cent in the second-quarter, Bureau of Statistics data released this morning showed.The year-on-year growth rate for the second-quarter was also revised to 2.4 per cent.

The Australian dollar, which was trading at 91.36 US cents before the release, fell to three-month lows. It was buying 90.56 US cents about 1.30pm.

"Today’s numbers are a reminder of the tough trading conditions in the economy, particularly outside of the mining sector," federal Treasurer Joe Hockey said.

The latest GDP figures showed the Australian economy was underperforming, Moody's Analytics associate economist Katrina Ell said."We are cautiously optimistic earlier rate cuts will bring growth back to trend at 3 per cent later in 2014," Ms Ell said, adding that monetary policy could take up to a year to flow through to the economy. The last cut to the cash rate was in August.

"There have been tentative improvements in the interest-sensitive sectors like retail and construction that should improve further in coming months."

Economists had consensus forecasts of 0.7 per cent growth for the quarter and 2.6 per cent year-on-year. Growth in the third-quarter was driven by the mining industry, which added 0.3 per cent to GDP.

The construction, transport, postal and warehousing, financial, public administration and healthcare industries also contribute 0.1 per cent each to growth.

The latest growth figures showed households were continuing to save at high levels. The households savings ratio has risen to 11.1 per cent for the third-quarter, up from 10.2 per cent.

"It means that you can't expect to see consumption as a major driver of growth in the economy. We really need to see housing continue to recover and we also need to see other areas like non-mining business investment picking up," Citi's chief economist Paul Brennan said.

"The picture coming out of these national accounts today suggests that growth is only going to pick up slowly next year. Monetary policy is working, but there's a few headwinds, including the unwillingness of consumers to ease up on the level of their savings."

Mr Hockey said the pace of economic growth was not strong enough to generate jobs for all Australians.

"Combined with other economic data it is clear that the nominal growth forecasts in the [Pre-Election Economic and Fiscal Outlook] will not be reached. This points towards a further deterioration in the budget bottom line," he said.

Balance of payments data released yesterday pointed to signs that a growth transition was underway.

Export volumes grew by 0.1 per cent as import volumes fell by 2.4 per cent for the third-quarter. Net exports were expected to add 0.7 percentage points to third-quarter GDP.

The current account deficit for third-quarter widened to $12.7 billion from $12.1 billion in the previous quarter.

The Reserve Bank had revised down its growth forecasts for Australia in 2014 and 2015 after it said mining investment was set to fall-off at a faster-than-expected pace over the next year.

Questions1. What is the purpose of the article?The purpose of the articles is to inform the reader on the current situation in the Australia economy, in particular the figures in the third quarter of the economy.

2. What did the current GDP, show about Australia's economy?The GDP shows that the Australian economy was underperforming and not living up to expectations

3. How much has the Australian household saving ratio risen from?Australia's household saving ratio has risen from 10.2% to 11.1%

4. What does this mean for Australia?With Australia's household saving ratio rising, we can't see consumption as a major driver of the growth in the Australia economy.

5. Growth in the GDP during the third quarter, was driven by what industry.Australia's GDP was driven by Australia's mining industry, adding 0.3 percent to the GDP.

6. "We really need to see housing continue to recover and we also need to see other areas like non-mining business investment picking up,". What are these different areas? Construction, transport, retail, financial, healthcare industries are the sort of areas that Citi's chief economist said should start picking up.

7. What was the Australian dollar worth, before the release and after the release?The Australian dollar fell from 91.36 US cents to 90.56 US cents.

8. Why is it important for Australia that our exchange rate fell?It's important to Australia that our exchange rate fell, as it means when trading with countries, our goods and services are worth less.

9. What statistics pointed to signs that a growth transition was underway?Export volumes grew by 0.1 percent as import volumes fell by 2.4 percent. Net exports were expected to add 0.7 percentage points to the GDP. The current account deficit widened to $12.7 billion from $12.1 billion in the previous quarter.

10. Export volumes grew by 0.1 per cent as import volumes fell by 2.4 per cent for the third-quarter. What does this mean for Australia?When levels of exports increase, Australia's national income also increase, which can lead to different outcomes like more employment and balance of trade of Australia.

Part 3 - Cartoon