COVID-19 remained the big story of the last quarter. 

Tragically, by the end of September the pandemic had caused more than one million deaths. That was up by 500,000 since the end of the previous quarter, and many countries were experiencing devastating ‘second waves’. 

While most of Australia managed to keep case numbers of coronavirus at very low levels, Victoria provided a case study in the severe human and economic impacts of having the virus escape control. 

Now it is epidemiologists, rather than economists, that we look to for advice on how to transition to a post-pandemic world.

Unemployment ups, downs

The official unemployment rate from the Australian Bureau of Statistics was 7.5 percent in July, but showed a welcome drop to 6.8 percent in August. 

Meanwhile, NSW claimed that 70 percent of jobs initially lost in the pandemic had been restored. However, when JobKeeper, people working zero hours but classified as employed, and a big jump in gig workers are taken into account, the real unemployment rate is much higher. 

Roy Morgan estimated the actual unemployment rate was closer to 13.8 percent and the combined unemployment and under-employment rate was 22.8 percent. Still, both these figures were down from their peak in late March.

Property problems

The major property markets of Sydney and Melbourne declined for the fourth month in a row, with the ABS reporting in the June quarter these major city housing markets dropped by 2.6 and 2.8 percent respectively. And the outlook for housing construction is none too rosy. 

Australia relies on immigration to generate the population growth that stimulates construction and supports the prices of existing dwellings. With our borders effectively closed, that population growth will either be delayed or will fail to materialise. Rental income is also expected to decline, particularly in markets with a high proportion of overseas students who are unable to return to Australia.

The markets

After a bit of a rally through July and August the local share market ran out of steam, with the S&P 500 index finishing the quarter down by 1.4 percent. 

International markets continued to produce some excitement. 

Despite weakening a little towards the end of the quarter, the MSCI All-Country World Equity Index rose 7.2 percent. Much of this was attributable to the US market with the S&P 500 up 7.6 percent and the NASDAQ up 10.2 percent.

The Aussie dollar also weakened slightly towards the end of the quarter, finishing flat against the Euro and British Pound, up two percent against the Yen, and up 3.8 percent against the US dollar.

The outlook

If you thought that interest rates could not go any lower, think again. 

The RBA has flagged the possibility of a further cut in the cash rate with commentators predicting a cut of 15 basis points to take the rate to just 0.1 percent. Internationally, the US presidential election could see an increase in market volatility with the final outcome anything but certain.

• The information provided in this article is general in nature only and does not constitute personal financial advice.

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