At the start of another New Year we wish everyone a happy, healthy and prosperous 2018. Whether you are on holidays or back at your desk, we hope you had time to recharge and refresh over the summer break.
There was no let-up in the flow of economic information in December. The US Federal Reserve lifted its benchmark interest rate for the fifth time since the financial crisis, signalling its confidence in the US economic recovery. The safe passage of President Trump’s corporate tax cut through Congress also augurs well for growth.
In Australia, the Mid-Year Economic and Fiscal Outlook revealed the Government now expects a budget deficit of $23.6 billion in 2017-18 (1.3 per cent of GDP), down from earlier estimates of $29.4 billion, due to improved employment and business profits. The deficit is expected to narrow to 0.1 per cent of GDP within three years. The latest ABS data showed profits were up 26.9 per cent in the year to September, while job ads rose 12 per cent in the year to November. The NAB monthly business survey showed business conditions in December were close to the best they have been in 20 years. Despite slow wage growth of 2 per cent in the year to September, consumer confidence is also improving. The Westpac Melbourne Institute consumer sentiment survey rose 3.6 per cent in December, buoyed by continuing low prices and low interest rates. Inflation remains at 1.8 per cent while the official cash rate was unchanged in 2017 at 1.5 per cent.
Read more from our January 2018 update here:
- See yourself successful
- 2017 Year in Review: Fair winds guide investment returns
- Investing to achieve your goals
If you would like to discuss your financial position and existing strategy, give us a call on 08 83620060