The Reserve Bank has again decided to leave official interest rates at the record low of 2.0 percent over November. Rates have now been on hold for six consecutive months but the prospects are increasing for a near-term rate cut.
Concerns over the current and likely future performance of the global economy continue to grow. US regulators have again decided against the widely anticipated increase in official interest rates reflecting ongoing concerns of the strength of its economy. China has again cut interest rates as local growth levels deteriorate with Europe and Japan initiating policies to revive chronically flat economies.
Global stockmarkets remain volatile with the Australian stockmarket failing to make significant headway following sharp falls over recent months.
Latest national unemployment data for September was disappointing with the ABS reporting the number of employed fell by 5,100 seasonally adjusted over the month. A fall in the participation rate however held the unemployment rate at 6.2 percent still close to the highest rate for 12 years. The national jobless rate has now remained above 6 percent for 16 consecutive months.
Latest ABS inflation data was also below expectations and reflects a largely stagnant local economy.
Home building approvals fell again over September but levels remain well ahead of those recorded last year. Retail sales rebounded over August after a fall in July but annual growth remains below the year before.
Growing concerns over the level of local economic growth and sharply diminishing activity in housing markets will likely however keep the Reserve Bank focused on the possible need for further stimulus through additional cuts to interest rates.
Dr Andrew Wilson is Domain Group Senior Economist