The Week In Politics
The Governor of the Reserve Bank Dr Phillip Lowe could signal an interest rate rise in December
The ABS data released on Thursday showed that Australia’s job performance was the best for 17 years.
One economist described it as ‘stellar’.
More than 54,000 jobs were added in August, most of them full time.
The number was well above the median forecast of 12,500 jobs.
The July figure for total employment was also revised upwards to 12,214,700, from 12,201,400.
The unemployment rate held steady at 5.6%, in line with forecasts.
After edging lower prior to the release of the report, the Australian dollar popped higher on the data, rising back above US 80 cents.
Royal Bank of Canada strategist Su-Lin Ong said that, given the recent run of jobs growth, key labour market indicators will “become increasingly important in the policy debate as we head into 2018.”
“A stellar labour force survey should give the RBA greater confidence that its base case for a lower unemployment rate, firmer wages growth and eventual return to target inflation is on track,” Ong said.
The strong labour market numbers and the improvement in corporate profit means that the budget figures are likely to be better than projected when the 2016-17 budget is finalised next month.
It is quite possible that the budget will return to surplus earlier than anticipated.
The Governor of the Reserve Bank Dr Phillip Lowe will address the American Chamber of Commerce in Perth on Thursday on ‘The Next Chapter’.
It’s possible that on Thursday morning he will make a policy announcement which will indicate an interest rate rise in December.
This will be a strong indication that the economy has turned the corner.
If business takes the signal then it will start to negotiate wage rises with employees who at the moment are relying on award wages to get by.
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