Economic Outlook

Outlook 

Australia’s economic signals are mixed. On the plus side, the recent revival in employment continues, with August recording job gains of 111,000 and the unemployment rate edging down from 7.5% to 6.8%. Consumer sentiment also rebounded in September. Countering this is confirmation that the Australian economy is in a deep recession, with the economy contracting by 7% in the June quarter, the largest decline since quarterly data started in 1959. There was further bad news with retail spending falling 4.2% in August given Melbourne’s virus lockdown. Some state borders are opening up but the majority remain closed, with 1 November (after the Queensland election) flagged as the possible opening for QLD/NSW. Victoria remains isolated.

In the US, it’s not just the presidential election result, but its validity and timing that is creating uncertainty. President Trump’s confirmation that he has coronavirus has added to confusion around how it will play out. While volatility appears to have diminished, uncertainty appears the only certainty in the near term.

Article written 6 October 2020.

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