RBA: Wage growth likely to remain low for a while

Omkar Godbole FXStreet Contributor

The Reserve Bank of Australia (RBA) is expecting a gradual decline in unemployment to 5 percent over the next couple of years, according to the October policy statement. However, the central bank does not see the labor market tightening translating into wage price inflation for a while.

Key points (Source: Reuters)

Low rates supporting economy
Progress on unemployment, inflation expected to be gradual
GDP growth to average a bit above 3 pct in 2018, 2019
Business conditions are positive
Housing markets have slowed in Sydney, Melbourne
Public infrastructure investment supporting economy
Household consumption a source of uncertainty
Outlook for labour market remains positive
Credit conditions tighter than they have been for some time
Expects inflation to be higher in 2019, 2020
Further gradual decline in unemployment expected over the next couple of years to 5 percent
Wage growth remains low, likely to continue for a while
AUD remains in range of past couple of years
AUD has fallen against US dollar, along with most other currencies
Drought has led to difficult conditions in farm sector

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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