The growth in annual consumer price inflation (CPI) eased slightly to 3.1% y/y in August 2020 from 3.2% y/y in July 2020 in line with market expectations and driven by lower changes in food and electricity prices. The main contributors to the headline were food and non-alcoholic beverages, housing and utilities as well as miscellaneous goods and services categories, which slowed to 3.9% y/y, 3.1% y/y and 6.6% y/y in August 2020 from 4.3%, 3.2% and 6.7% y/y respectively. Collectively, these categories added 2.6 percentage points to the total. On a monthly basis, CPI increased by 0.2%....

The official unemployment rate of 23.3% is not very useful for policy making...

Today at 11:30 Stats SA will release the Quarterly Labour Force Survey (QLFS) statistics for unemployment for the second quarter of 2020, which will give us a first formal tally of jobs destroyed by the impact of the lockdown on the economy. We expect the unemployment rate to have increased to 34%, slightly below the Bloomberg consensus expectations of about 35%. The range of forecasts spans from 31% to 50% unemployment rate, which is an indication of the uncertainty surrounding the estimation of labour statistics as a result of the pandemic. ...

On 22 September 2020, the World Health Organization (WHO) noted that the past week saw the highest number of reported coronavirus cases in a single week since the pandemic began. This comes as global coronavirus cases surpassed 32 million cases and continue to increase in Europe, raising fears of a second wave. ...

When politicians and economists disagree, the politicians prevail. Nowhere is this truism more pronounced and the stakes higher than in the budget-making process of our country....

South Africa has an economic structure which structurally differs from 13 peer emerging markets economic structure, in that it has an under representation of agriculture, manufacturing, construction and energy while it has an over representation of government services and financial serves. That is part of the structure of the economy that needs to be reformed to put the country on a higher job creation and economic growth path.  ...

Econometric modelling is both science and art. The science is the robust mathematical representation of the economy, which is never precise on aggregate because the population of most economic variables are either estimates or cannot physically be measured accurately. The art is where judgement comes in. Where there are temporary shocks to the economy like covid-19, judgement should be applied so that permeant decisions are not made based on temporary shocks. ...

Globally, traditional economic data is out of date before it is published. This is true of SA’s GDP statistics that showed a shocking annualised and seasonally adjusted -51% contraction in the second quarter, in line with other countries. So much that the urgency to open the economy fully became apparent. Combined with health data that showed a significant moderation in new covid-19 infections and a high recovery rate, President Ramaphosa announced that the country will be moving to level one in the risk adjusted covid-19 strategy. What can we learn from other countries that have eased restrictions faster than SA?...

First, technology glitch swallowed yesterday's Markets Daily. That is now solved, and we are back with fewer steps of human intervention in sending you this daily. The Tralon Digital Agency , run by dynamic young people at the heart of cutting edge technology, are superb. You may need to check them up....