US labour market trends weaken, SA’s GDP picks up marginally

--:--

The US August labour market report was mixed. It showed an improvement in the unemployment rate to 4.2% from 4.3% in July, but the number of jobs created was below the monthly average. Whether the US Fed will cut interest rates by 25 bps or 50 bps later this month to stimulate the economy is under debate. STANLIB believes a 25 bps cut is most likely, followed by a series of others.
In Q2 2024, SA’s GDP grew by 0.4% q/q, better than the zero rate of growth in Q1, but still very weak. Growth was driven by higher electricity production, financial services and retail spending post-election. While there is no sign of broad-based growth, looming interest rate cuts, the cash released from the two-pot retirement system and public-private partnerships may stimulate the economy next year.
Click here to listen to the podcast.

9 Sep English South Africa Investing · Business News

Other recent episodes

SA’s lower inflation rate surprises and SARB cuts interest rates by 25 bps

SA’s headline inflation rate for October fell to 2.8% y/y, which was lower than expected, showing a pleasing reduction from above 5% in June. A key reason was a drop in fuel inflation, which is currently -19%. Food inflation has also dropped below 3% from over 14% in 2023. However,…

25 Nov 12 min

US October inflation data still high; S&P upgrades SA’s credit rating outlook

The US inflation rate in October was 2.6% y/y from September’s 2.4%, which was in line with expectations but still above the US Federal Reserve (Fed) target of 2%. Core inflation, however, is at 3.3%, largely due to shelter prices, and there are other inflationary pressures which will require the…

18 Nov 11 min

Republicans sweep US election and US Federal Reserve cuts interest rates

The Republican Party is on the verge of securing a sweeping election result, which puts President-Elect Donald Trump in a powerful position to effect policy changes. These policies could stimulate growth, but also have negative consequences. They include extending tax cuts, imposing a wide range of import duties (which could…

11 Nov 13 min

US labour market reports

A range of US labour market data was released last week but it was distorted by the hurricanes in September and October. Only 12 000 jobs were created in October – way below the 100 000 that the market expected, but the response rate to the survey was low. The…

4 Nov 6 min

MTBPS 2024: bond market registers disappointment

The MTBPS delivered by the Minister of Finance disappointed bond investors, says Victor Mphaphuli, STANLIB Head of Fixed Income. In the current fiscal year, revenue collection is weaker and expenditure greater than expected, with the budget deficit seen at 5% vs 4.5% projected in February. The 10-year government bond peaked…

30 Oct 4 min

All episodes