Commentary on the Reserve Bank of Australia minutes (headlines here from earlier) out today
(Bolding is mine)
On employment:
- Employment growth was described as having "moderated"
- In these minutes the Board chooses to highlight that this underemployment rate has not fallen to the same extent as the official unemployment rate indicating that slack in the labour market is greater than implied by the unemployment rate.
- These comments put a less positive spin on the labour market than we have seen for some time.
On the housing market:
- was also described as mixed
On the Banks' liaison work
- Was noted that non-mining business investment had been growing
Inflation:
- However much more importantly, liaison on inflation was less encouraging
- The Bank's surveys and measures of inflation expectations were noted as having "remained below average".
Conclusion
- The minutes clearly leave the door open for another rate cut in August. This will depend upon the June quarter inflation report
- While the Board and the Governor consistently note that the level of the AUD could complicate the economic outlook there does not appear to be any heightened concern about the current level of the currency
