Central Banks

RBA Dep Gov Debelle speech on the labour market in Australia 

  • Says labour market in pretty good shape   
  • Expects employment to grow a bit above trend over next six months
  • vacancy rate at highest relative to size of the labour force
  • above average economic growth to gradually reduce labour spare capacity
  • Says expects this will lead to gradual increase in wages and inflation
  • Says unemployment could fall further than in past before wages pick up
  • Says chance jobless rate could decline faster if participation steadies

full text: The State of the Labour Market

The point about Debelle’s comments here is he doesn’t doesn’t see rising wages, which would be a precondition (so the current thinking goes) for a pick up in core inflation  and thus a move from the RBA to hike rates.

So, key takeaway, hikes a good while off



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