While Inflation Is a Worry, Key Economic Benchmarks Improve
From Australia’s CPI surge and inflation numbers to the ECB’s strategic interest rate decisions, and the impressive US GDP growth rate in our summary.
Australia’s Economic Landscape
Inflation Sparks Discussion
In the September Quarter, Australia’s Consumer Price Index (CPI) saw a notable increase of 1.2%, revealing price surges in essential sectors. Automotive fuel took the lead with a 7.2% rise, while rents, new dwelling purchases, and electricity followed suit.
Over the past year, the CPI witnessed a substantial 5.4% rise, marking a steady climb from previous quarters. Notably, this figure shows a significant dip from the peak of 7.8% recorded in December 2022.
Rental Markets and Utilities
Rental prices soared by an impressive 7.6% annually, underscoring the tight rental markets in major cities. Meanwhile, utilities experienced a whopping 12.6% surge, a result of price reviews in electricity, water, and gas.
ECB’s Strategic Moves
Interest Rates and Inflation Targets
The ECB Governing Council opted to maintain key interest rates, signaling their determination to curb inflation. With rates held at 4.50% for main refinancing operations, 4.75% for marginal lending, and 4.00% for deposit facilities, the Council aims for a 2% inflation target.
September saw a notable drop in inflation, influenced by base effects. Measures of underlying inflation continued to decrease, indicating ongoing efforts to stabilize the economic landscape.
Policy and Programme Adjustments
The Asset Purchase Programme is on a steady decline, reflecting the ECB’s calculated approach. Additionally, reinvestment of principal payments in the Pandemic Emergency Purchase Programme is set to continue until at least the end of 2024, ensuring sustained economic stability.
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US Economic Resilience and inflation
GDP Surges Ahead
In a remarkable display of economic strength, the US Gross Domestic Product (GDP) surged at an annual rate of 4.9%, marking a substantial acceleration from the previous quarter’s 2.1% growth.
Consumer spending, private inventory investment, exports, government spending, and residential fixed investment played pivotal roles in this impressive growth. However, nonresidential fixed investment saw a decrease, tempering an otherwise stellar performance.
Current dollar GDP recorded an 8.5% annual increase, reaching a staggering $27.62 trillion. The price index for domestic purchases reflected a 3.0% jump in Q3, compared to 1.4% in the preceding quarter, indicating a robust economic environment.
Savings and Income
Personal income showed a significant increase of $199.5 billion, while disposable income rose by $95.8 billion (1.9%) in Q3. Meanwhile, the personal saving rate saw a slight decrease from 5.2% to 3.8%, indicating steady economic growth.
For the latest economic updates and insights, make sure to check back on our blog regularly. Your source for informed and strategic trading decisions.