For weeks the Reserve Bank has been telling us the economy is growing at "close to trend", but the indicators we got this week leave little doubt we're travelling at below trend.
Had the Reserve's forecast of growth in real gross domestic product of 2.75 per cent over the year to December been achieved, this would indeed have meant the economy was expanding at close to its medium-term trend rate of growth.
But this week's national accounts showed GDP growing by a weak 0.4 per cent in the December quarter and by just 2.3 per cent over the year to December.
There are always things you can quibble with in the Bureau of Statistics' initial estimate of growth for a particular quarter. It's always rough and ready, subject to revision as more reliable figures come to hand.
But it's hard to quibble this time because the story of weakness the national accounts are telling was confirmed by the independently estimated labour-force figures published the next day.
These February figures showed about 3000 jobs a month were created in the past six months, with the rate of unemployment essentially steady at 5.2 per cent, just a bit above the rate the econocrats regard as the lowest sustainable rate we can achieve.
Something else the Reserve has been saying is that the economy's being hit by two huge, but opposing, external shocks: the expansionary effect of our high export prices and all the spending being undertaken to expand our mining capacity, but also the contractionary effect of the high exchange rate, which has reduced the international price competitiveness of our export and import-competing industries.
The economy's below-trend growth suggests the contractionary force may be gaining an edge over the expansionary force. This increases the likelihood of another cut in the official interest rate before too long.
It's important to recognise, however, just why the reported weakness in the March quarter occurred. The greatest single reason was the utterly unexpected fall of 1 per cent in business investment spending. This is actually good news in the sense it's a blip that won't be repeated this quarter. We know the mining construction boom has a lot further to run.
The greatest (but longstanding) area of weakness in the economy is spending on the construction of new homes. It fell 3.8 per cent in the quarter and 1.8 per cent over the year to December. And doesn't look like recovering any time soon.
If you combine the fall in home building with the (temporary) fall in business investment you find the total fall in private sector investment spending subtracted 0.4 percentage points from the overall growth in GDP for the quarter.
If you listen to the retail industry's propaganda you could be forgiven for thinking weak consumer spending must be a big part of the story. Even the Treasurer, Wayne Swan, is still banging on about the "cautious consumer".
But though it's true the growth in consumer spending of 0.5 per cent is on the weak side, consumption nonetheless contributed 0.3 percentage points to overall growth in the December quarter.
And over the year to December consumption grew by 3.5 per cent - that's definitely "close to trend". If consumers really were being cautious we'd be seeing this in a rising rate of household saving. In truth, the rate dropped a little in the December quarter.
But when you look through the quarter-to-quarter volatility, it's clear the saving rate has essentially been steady at about 9.5 per cent of household disposable income for the past 18 months. That's not cautious, it's prudent.
To say consumers are cautious implies that when their confidence returns they'll start spending more strongly. That's a misreading of the situation. Their spending is already growing at trend. They've got their rate of saving back to a more prudent level after some decades of loading up with debt, and from now on their spending is likely to grow at the same rate as their income grows.
What's wrong with that? Nothing. If it leaves the retailers short of customers, that's their problem. Don't be conned: in a market economy, the producers are meant to serve the consumers, not vice versa. If the retailers are selling stuff people don't want to buy - or at prices people don't want to pay - the retailers have to adjust to fit.
We don't have a problem with weak consumer spending; the retailers, who account for less than a third of all consumer spending, have a problem because consumers have switched their preferences from goods to services.
To bang on about the "cautious consumer" implies the retailers' - and, more particularly, the department stores' - problem is cyclical (it will go away as soon as consumers cheer up) rather than structural (it will last until the businesses involved do something to solve it).
A build-up in business inventories contributed 0.3 percentage points to the overall growth in GDP during the quarter. This is a temporary contribution that could be reversed in the present quarter, but Dr Chris Caton, of BT Funds Management, offers the reassuring calculation that the ratio of non-farm inventory to sales was coming off a record low.
For once, the external sector - exports minus imports - made a positive contribution to overall GDP growth during the quarter, of 0.3 percentage points. That was because the volume of exports rose 2.2 per cent, whereas the volume of imports rose only 0.7 per cent.
If you look at the figures over the full year, however, you see a very different story: export volumes in this December quarter were up only 0.8 per cent on December quarter 2010, whereas import volumes were up 12.8 per cent, causing the external sector to subtract 2.6 percentage points from through-the-year growth.
Finally, a key development that's not directly reflected in the GDP figures, but will have a dampening effect on them in coming quarters: for the first time since the global financial crisis our terms of trade have deteriorated - by 4.7 per cent in the quarter - as import prices rose and, more particularly, export prices fell.
So whereas the volume of the nation's production of goods and services (real GDP) rose 0.4 per cent, our real gross domestic income fell 0.6 per cent.
It's production that generates jobs, but the nation's real income declined because the terms on which we trade with the rest of the world deteriorated.
