Daily Commentary BY THE CURVE TEAM –

Economic Recovery Mixed

1st of December, 2020

The beginning of the final month of 2020 saw multiple economic updates, with both encouraging and underwhelming news.

In positive news, businesses bounced back in Q3 following a torrid start to the year. Company profits were up 3.2% for Q3 and wages were up 2.4%.

Government support continued to inflate wages and profits for Q3. Inventories are also being run down much less quickly than earlier in the year.

Following a 2.9% decline in inventories in the June quarter, September saw a fall of just 0.5%.

Contrasted to this was credit being flat for October, with growth of 0%. Owner occupied housing continues to lift the figure, up another 0.41% for the month and 5.4% on last year.

Business credit declined for a 6th consecutive month and investor housing rose only slightly. These are expected to continue to drag overall credit down.

Further updates are ahead today, with the RBA’s policy decision the headline. No change is expected to the current policy stance.

Josh Stewart

Associate- Money Markets