Quick thoughts on RBA – a bit more optimistic on investment and labour

The RBA statement is pretty close the previous one, but they have signaled some improvement in the outlook for non-mining investment, and the labour market.

They said, “The outlook for non-mining investment has improved recently and reported business conditions are at a high level.”

This sounds more confident than the previous statement that said, “Business conditions have improved and capacity utilisation has increased. Some pick-up in non-mining business investment is expected.”

On the labour market they said, “The various forward-looking indicators point to solid growth in employment over the period ahead.”

An upgrade from the previous statement that said, “The various forward-looking indicators point to continued growth in employment over the period ahead.”

However, despite shifting the wording from “Continued growth” to “solid growth”, they still concluded that, “The unemployment rate is expected to decline a little over the next couple of years”

The comment on wages might be seen as a bit more optimistic.  They continued to say, wages growth is low and this is likely to continue for a while yet.  However, they added that, “Stronger conditions in the labour market should see some lift in wages growth over time”.  Again giving a bit more weight to recent strength in the labour market.

On the housing market, the commentary is similar, although they single out “Sydney” for the first time.  They said, “Housing prices have been rising briskly in some markets, although there are signs that conditions are easing, especially in Sydney.”

The comment on the exchange rate, the global economy and the final policy assessment were essentially unchanged.

September 5 RBA statement

August 1 RBA Statement

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Greg Gibbs,
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