It’s December, summer is here and holidays are just around the corner.
The big story on the global economic front continues to be inflation, and how high interest rates will go to tame it. November began with the US Federal Reserve hiking its federal funds target range by another 75 basis points to 3.75-4.00%. There are signs the tough approach is working, with the annual rate of inflation falling from 9.1% in June to 7.7% in October.
In Australia, the Reserve Bank lifted the cash rate another 25 basis points to a decade high of 2.85%. Inflation fell to 6.9% in the year to October, down from 7.3% in September, but remains high and economic signals are mixed. Reserve Bank governor Philip Lowe is keeping a close eye on consumer spending, where higher interest rates are having an impact. Retail trade fell 0.1% in October for the first time this year. But rate hikes are not yet affecting the labour market, with unemployment falling to a 48-year low of 3.4% in October, while annual wages growth rose 1% to 3.13% in the September quarter, the fastest growth in a decade.
The Aussie dollar lifted 3c to around US67c over the month, crude oil prices fell 10% while iron ore lifted 0.5%. Shares remain skittish but positive overall. The ASX200 index rose more than 5% in November while the US S&P500 index was up more than 2%.
We are not going to lie – we will be glad when 2022 is behind us. It really has been our most hectic year one way or another. If anyone knows a qualified accountant / tax agent who has moved into the area and is looking for work we would love to talk to them.
Our last day at work before the holiday break will be Friday 16 December, and we’ll be back on deck (hopefully refreshed and ready to hit some real goals next year) on Monday 9 January.
We take this opportunity to wish you and your family a happy festive season! All the best – Stuart, Heather, Stacey and Linda.
