Economics Weekly – 11th of November 2016

· SA: September mining production expanded 3.4% year-on-year, seasonally adjusted and by 0.9% month-on-month. September manufacturing production was flat year-on-year, having expanded 2.2% in August.
· SSA: Price pressures in Mozambique have intensified over the last couple of months as headline inflation surged to 25.5% y/y in October.
· Global: The closely watched US elections trumped data releases this week—quite literally—as the underdog, Donald Trump, was elected as the president of the United States. Markets roiled on the day, and have been volatile ever since, particularly as speculation mounts over Trump’s fiscal stimulus plans resulting in the Rand depreciating by approximately 100 cents.

Local / Rounding –up 3Q data

The Quarterly Labour Force Survey should paint a rather bleak picture of the labour market. If there is any improvement in the unemployment rate it will likely be due an expansion in discouraged work seekers—the expanded definition of unemployment will be closer to the truth.

The economy has struggled to create jobs for some time and, as such, FNB does not expect any improvement anytime soon. The deceleration in retail sales in the first two months of 3Q suggests that South Africa is in for a rather dismal quarter. September retail sales figures – scheduled for release next week should confirm this view. If the latest household credit numbers are anything to go by, South Africa should see a sustained weakening in retail sales. Weak consumer confidence, higher interest rates and weak disposable income growth also point to weak retail sales growth.

Read more here: Economics Weekly 11th November 2016