Economic & Market Update September 2023

File: Economic & Market Update

Duration: 02:17

Date: September 11, 2023

00:01 Economic Review September 2023

00:03 Inflation, and its implications for the economy and markets, continues to be the main focus in the media.

00:09 The Reserve Bank of Australia continued with its rate pause on the 5th of September, extending the interest rate relief for borrowers.

00:17 Echoing comments from last month, the RBA stated: “This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.”

00:24 “Inflation in Australia… is still too high and will remain so for some time yet.” And “Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe”

00:33 Looking globally, with sticky “services” inflation and continuing consumer demand, economists are expecting rates to stay higher for longer as Reserve Banks attempt to avoid an inflation spiral.

00:43 The Australian share market had a poor month, losing -0.73% for the month with a return of 9.56% for the year.

00:49 This was in contrast to global developed markets, which saw International Shares rise 1.65% for the month, contributing to an annual performance of 23.27%.

00:57 The strong international share market performance over the last 12 continues to benefit from the low 12 months ago and is generally led by a concentrated few technology stock across global markets.

01:11 The monthly Consumer Price Index (CPI) indicator rose 4.9% in the twelve months to July, according to the latest data from the Australian Bureau of Statistics (ABS).

01:18 Michelle Marquardt, ABS head of prices statistics, said: "This month’s annual increase of 4.9 per cent is down from 5.4 per cent in June. Annual price rises continue to ease from the peak of 8.4 per cent in December 2022.”

01:27 "CPI inflation is often impacted by items with volatile price changes like automotive fuel, fruit and vegetables, and holiday travel.

01:33 When excluding these volatile items, the decline in annual inflation is more modest at 5.8 per cent in July, compared to 6.1 per cent in June,” Ms Marquardt said.

01:46 The Australian Dollar fluctuated up and down for the month in a range of 3.76%, finishing the month up at 0.6483 USD, a monthly decrease of 2.35. US cents.

01:52 Consumer confidence dropped slightly in August, moving from 78.4 to 78.1 points. With the index remaining below 80 points, and at 26 weeks, continues the longest stretch at this level since the 1990-91 Recession.

01:59 Australia's seasonally adjusted unemployment rate increased to 3.7% in July from 3.5% in the previous month, above market expectations of 3.6%, and pointing to the highest level since April.

02:07 The participation rate continued to edge down to 66.7% from May's record high of 66.9%.