Economic & Market Update March 2024

File: Economic & Market Update

Duration: 02:36

Date: March 25, 2024

00:01 Economic Review March 2024

00:04 At their March review, the Reserve Bank of Australia decided to keep the cash rate target unchanged at 4.35%.

00:11 The decision to hold interest rates steady followed a range of inflation measures showing small but steady falls in the rate of inflation.

00:16 Looking Internationally, inflation has come down generally, but the “last mile” of under 3% is looking harder to achieve and is pushing out market expectations of cuts globally.

00:25 The Australian share market had a bad month in February, losing 0.79% for the month, but holding on to a positive return for the last year, growing 1.99% over 12 months.

00:34 This was in contrast to global developed markets, which saw International Shares increase to 5.96% for the month, with a huge annual performance of 30.46%, albeit off a very low base the year before.

00:43 Continued speculation in the “Mega Cap” tech stocks continued to see US stockmarket prices surge, with commentators questioning whether we are witnessing a new Tech “bubble”.

00:58 The Consumer Price Index (CPI) rose 3.4 per cent in the 12 months to January 2024 according to the latest data from the Australian Bureau of Statistics (ABS).

01:07 Michelle Marquardt, ABS head of prices statistics, said: “Annual inflation for the monthly CPI indicator was steady at 3.4 per cent and remains the lowest annual inflation since November 2021.”

01:17 The most significant contributors to the January annual increase were Housing (+4.6 per cent), Food and non-alcoholic beverages (+4.4 per cent), Alcohol and tobacco (+6.7 per cent) and Insurance and financial services (+8.2 per cent).

01:27 Partially offsetting the annual increase is Recreation and culture (-1.7 per cent) primarily due to Holiday travel and accommodation (-7.1 per cent).

01:36 “When excluding these volatile items from the monthly CPI indicator, the annual rise in January was 4.1 per cent, down from 4.2 per cent in December.

01:44 Annual inflation when excluding volatile items has been declining since the peak of 7.2 per cent in December 2022,” Ms Marquardt said.

01:57 The Australian Dollar fluctuated up and down for the month in a range of 1.91%, finishing the month down at 0.6496 USD, a monthly decrease of 0.65 US cents.

02:06 Consumer confidence increase in February to 83.2, still a very subdued level and still at a historical, long-time low.

02:14 Australia’s seasonally adjusted unemployment rate increased to 4.1% in January 2024, up from 3.9% in the prior month and above forecasts of 4.0%.

02:23 The participation rate was unchanged at 66.8%, compared to expectations of 66.9%, and after a record high of 67.3% last November.