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Australian economy

Thanks to a drop in the labour force, the unemployment rate in Australia dropped back down a little to 3.6%. As highlighted by the treasurer, this figure is likely not giving the full picture of potential 'full employment' within the economy, with many Australians remaining 'underemployed'¹. 

International economy

The US economic picture continues to remain strong, with the advanced reading for economic growth coming in at an annualised 4.9% in the September quarter. This was comfortably above expectations and highlights the robustness of the current US economy. This is in stark contrast to a slight negative growth reading out of the EU with economic conditions stagnating across most of the continent¹. 

Investment Markets

October was not kind to investors, with most markets falling over the month. Australian equities were some of the worst hit, with average declines of around 4% experienced. The month also saw a sizeable jump in bond yields, with 10-year rates in Australia and the US hitting up towards 5%; rates not seen since for over a decade². 

Outlook

Many are expecting a resetting of interest rate policy in 2024 - however, persistent inflation could derail such hopes and could lead to a continuation of equity market struggles. Thus, all eyes will continue to remain fixed on inflation rates.

S&P/ASX200 - 12 months to 31 October 2023