Australian Economy – A fall in the unemployment rate distracted from relatively weak employment numbers1. A drop of 53,000 in full-time jobs was only partially offset by a rise in part-time jobs and the participation rate fell to 64.5%. On the housing front, which has a strong link to employment trends in Australia, the value of dwelling commitments was off by 1.0% and the dwelling approvals eased off in August after a strong showing in July1.
Global Economy – Employment and economic prospects across the developed world remain mildly healthy. UK and US unemployment is steady at around 5.0%2 and European unemployment looks to be heading back into single digits. GDP growth in the US was stronger than expected at 2.9% annualised for the September quarter while the corresponding figure for the EU stood at about 1.6%. In China, GDP growth for the September quarter came in at 1.8% (7.4% annualised), which was in line with market estimates3.
Investment Markets – Equity markets in Australia, the US and Hong Kong were all down about 2% in October as volatility again began to jump near the end of the month4. Europe and Japan both continue to recover slowly from their Brexit lows, while Chinese equities bounced back from a poor August.
Outlook – The end of the US election process might help in the easing of market volatility. There are a few dark clouds that are likely to replace the circus that was the presidential race, with banking issues in both China and Europe high on the list of concerns.
S&P/ASX 200 – 12 months to 31 October 2016
Source: Core Equity Services
Footnotes: 1. Australian Bureau of Statistics; 2. Dept of Labour, USA ; 3. National Bureau of Statistics of China; 4. Bloomberg data.