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Money Matters: August Edition

It seems like there is not much month-to-month economic fluctuation recently. With interest rates remaining unchanged again in August and inflation staying in line with previous months, one would think that the economists have gone on holidays, but this is not quite the case. There is very good reason that many of the numbers have not changed or remain as they have for the last quarter and it all comes down to forecast or the outlook. Gross domestic product (GDP) - the countries relative inputs and outputs was downgraded to a growth rate of 2.75% - down 0.25%. Largely reflected by a higher Australian dollar, reduced capital expenditure (from the mining industry pull back) and the higher unemployment rate with over 3,000 jobs lost recently. In addition to the above, many of the consumer confidence indices in July and August continued to rebound, including the likes of first homebuyer, builder and business indices. This means that reconsidering any movement towards the end of the calendar year is slim and most likely awaits the Q4 retail sales result (Christmas and well into January 2015) before making any rash changes. This falls in line with the market expectations that the Reserve Bank will keep rates on hold for a considerable period of time – some even expect even up to mid-2015. But how do we compare from an international perspective? US is growing relatively well against other nations and reporting positive forecasts. Europe kept rates unchanged (incl UK) and reported a negative inflationary period. Japan expects slight contractions in the next quarter and China, well all signs are leading to a pull-back in the areas of manufacturing, financing and property – leading to policy adjustments in the future. Caution: The focal point for this month is not so much on dollars and cents but rather security, and in particular, job security. As the jobless rate increases, and businesses start to feel the pinch, it’s only a matter of time until this has a feedback effect on higher unemployment. Tip: Depending on the type of employment you are in, have a think about your job. What is happening to your industry in general and how secure is your particular role within your organisation. Have the discussion with your HR and manager(s) and see if there is any up-skilling or additional training that you could consider to further secure your role.