RBA Deputy Governor Debelle: Sees steady wage growth over next couple of years
|RBA commentary is what traders are focussing on today for the Aussie and we are now hearing from Deputy Governor Debelle on Employment and Wages to the Australian Council of Social Service national conference.
Analysts at Westpac explained that this is "a very hot topic but the main focus will still be Governor Lowe’s speech in the Sydney evening (8:05pm/ 5:05pm Sing/HK) to business economist on Unconventional Monetary Policy: Some Lessons from Overseas."
Key comments
- Sees steady wage growth over next couple of years.
- Growing evidence that wage rises of 2-3% now the norm in Australia, rather than 3–4%.
- If wage growth entrenched at 2-3%, tighter labour market will have to be to force a wage rise.
- Gradual lift in wages growth would be welcome for workforce, economy.
- Says wage lift also needed for inflation to reach 2–3% target range.
- Says jobs growth stronger than expected in recent years, but also labour supply.
- Supply driven by rise in participation rates of females and older workers.
- One key uncertainty is whether labour supply will continue to expand.
- Need unemployment down near 4.5% to lift wages.
FX implications
This is familiar rhetoric from Debelle and has no material impact on the Aussie.
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