Australian economy on rebound

After a year of slowing growth, Australia's economy is showing signs of warming up to aggressive central bank rate cuts aimed at boosting house-buying and retail spending to help offset a slowdown in the mining industry. Recent economic reports are fuelling optimism the strategy is working. Today, government data showed retail sales rose 0.8% in September from August, double the amount expected by economists, and that house prices extended their recent strong gains. Meanwhile, a report from ANZ showed the number of jobs being advertised across the country was about the same in October as a month earlier--continuing a recovery from a long string of sharp declines, according to (The Australian) website. "Conditions are clearly improving," said Nader Naeimi, who heads up a portfolio at AMP Capital, one of Australia's two biggest money managers, in Sydney. "What we're seeing is a recovery in the non-mining sector while mining itself hasn't collapsed. It looks like we're going to have a more balanced economy going forward." The central bank has cut interest rates eight times in the past two years to a record low 2.5% to help non-mining sectors take up the slack from the resources industry, where thousands of jobs were axed last year as China's economy slowed and major projects reached or neared completion. Last week, a report showed manufacturing activity expanded for the second straight month after contracting 26 times in a row. While the $1.5 trillion economy has been slow to warm to the rate cuts, there are signs that both business and consumer confidence are also improving, boding well for a further pick-up in spending that may help the economy extend its 22-year growth run.