US labour market strength surprises; SA collects more revenue than expected
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Several US labour market reports released last week were surprisingly strong. The US created 254 000 jobs in September, well above expectations for 150 000 jobs, while unemployment fell to 4.1% from 4.2%. This encouraged the equity market, as it suggested the US is not about to move into recession, but it dampened hopes for a 50 bps interest rate cut. The next cut is likely to be only 25 bps.
In SA, National Treasury’s estimate of revenue and expenditure for August showed the government is generally keeping spending within budget. Individual income tax collection was buoyant, largely as a result of fiscal drag, while corporate tax collection was also surprisingly strong. This means the October Medium-Term Budget Policy Statement (MTBPS) is likely to show only a modest revenue shortfall for the year.
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In SA, National Treasury’s estimate of revenue and expenditure for August showed the government is generally keeping spending within budget. Individual income tax collection was buoyant, largely as a result of fiscal drag, while corporate tax collection was also surprisingly strong. This means the October Medium-Term Budget Policy Statement (MTBPS) is likely to show only a modest revenue shortfall for the year.
Click here to listen to the podcast.