Australia’s central bank is keeping its policy options open as it predicted the economy probably cooled last quarter, momentum in the jobs market has eased and inflation is set to remain weak.
Second-quarter data available was “consistent with a moderation of gross domestic product growth following the stronger-than-expected outcome” three months earlier, the Reserve Bank of Australia said in minutes of its July 5 meeting in Sydney Tuesday.
“Inflation was still expected to remain quite low for some time,” the RBA reiterated after leaving interest rates at a record-low 1.75 percent. “Forward-looking indicators of employment had been slightly weaker over recent months following gains over the preceding year, but were still consistent with employment growth in the months ahead.”
The RBA is contending with an economy showing a mixed picture. Growth has been solid and the jobs market held up as a mining boom unwinds. At the same time, wage gains and core inflation are at record lows, which prompted a rate cut in May. The country’s key service industries of tourism and education are highly sensitive to the currency, which has risen 4.5 percent since the start of June, denting their competitiveness.
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Second-quarter data available was “consistent with a moderation of gross domestic product growth following the stronger-than-expected outcome” three months earlier, the Reserve Bank of Australia said in minutes of its July 5 meeting in Sydney Tuesday.
“Inflation was still expected to remain quite low for some time,” the RBA reiterated after leaving interest rates at a record-low 1.75 percent. “Forward-looking indicators of employment had been slightly weaker over recent months following gains over the preceding year, but were still consistent with employment growth in the months ahead.”
The RBA is contending with an economy showing a mixed picture. Growth has been solid and the jobs market held up as a mining boom unwinds. At the same time, wage gains and core inflation are at record lows, which prompted a rate cut in May. The country’s key service industries of tourism and education are highly sensitive to the currency, which has risen 4.5 percent since the start of June, denting their competitiveness.
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