Rising jobs and inflationary pressures intensify ahead of RBA meeting


National Australia Bank senior economist Tapas Strickland said hospitality and tourism ads rose 7% in the month, 113.6% above their pre-pandemic level , a sign of the impact of the closure of the international border on this sector.

He said as a further sign of the tight market, the number of people applying for jobs was on the decline, with shortages in government, the defense industry and the hospitality industry most acute.

The RBA has repeatedly stated that it wants to lower the unemployment rate to 4 percent in an effort to boost wage growth and inflation.

The Melbourne Institute’s monthly inflation measure, released on Monday, showed the cost of living rose 3.1% over the past year, mostly due to rising oil prices. More worryingly, the institute’s monthly measure of core inflation rose to 2.6 percent.

Tuesday’s meeting is the bank’s last for the year. It won’t meet until February, when it had planned to review its $ 4 billion-per-week bond buying program.

Loading

While markets don’t expect the RBA to change the official exchange rate at its meeting, economists believe the bank could use it as an opportunity to express its views on the direction of the ‘economy.

Westpac chief economist Bill Evans said a change in the bond buying schedule, to $ 2 billion per week, could come at the February meeting.

“Governor Philip Lowe continues to emphasize the patience of the board of directors with regard to the timing of the initial rate increase. Westpac remains comfortable with our view that the bank’s first move will come in February 2023, although markets are looking forward to a move in mid-2022, ”he said.


Comments are closed.