The Reserve Bank of Australia's Governor Lowe is speaking on the labour market:
- The Labour Market and Monetary Policy (link is to full text)
- to the Economic Society of Australia (an online event)
Headlines via Reuters:
- says step-down in bond buying does not represent a withdrawal of support by rba
- condition for rate increase depends upon inflation outcomes, not the date
- expect it will take until 2024 for inflation to be sustainably within 2-3% range
- likely wage growth will need to exceed 3% to get inflation in target range
- unemployment will need to be sustained in low 4s to be considered full employment
- says recovery of the Australian labour market this year has been remarkable
- positive surprises on jobs not matched with equivalent surprises on wages and prices
- says most firms retain strong focus on cost control, rather than raising wages
- plausible scenario is that borders open gradually over the period ahead
- extended border closure could see wage pressures build further in some sectors
- watching Sydney lockdown carefully, but expect economy to rebound quickly once over
Lowe is data-dependent not date dependent he says. Repeating what the Bank has been saying on wage growth needing to be >3% and not expecting a hike until 2024.
