The Reserve Bank says there are good prospects for economic growth in Australia which will eventually see higher wages and inflation as new data has shown improving employment conditions.
Despite this, RBA Deputy Governor Christopher Dr Kent remains of the view that inflation is unlikely to stay within the target range of 2-3% until at least 2024, maintaining interest rates. at record levels.
“Households and corporate borrowers continue to enjoy record interest rates on most loans, their balance sheets are in good shape and the economy benefits from favorable fiscal policy,” Dr Kent said in a statement. conference online Wednesday.
Economists have improved their growth forecasts following last week’s national accounts, whose economy has now fully recovered from last year’s recession.
Data from the Australian Bureau of Statistics showed salaried jobs rose 0.3% in the fortnight to May 22, following a 0.1% decline in the previous two weeks.
Salaried jobs are now 2.6 percent higher than a year earlier.
The report precedes the full May Labor Report due June 17.
At the same time, preliminary figures from the National Skills Commission showed internet job vacancies rose another 1.9% in May, to 46% above pre-pandemic levels.
Job vacancies have now increased for 13 consecutive months, a positive sign for future job opportunities.
“The labor market has recovered five times faster than what Australia experienced after the recession of the 1990s,” Treasurer Josh Frydenberg said in an opinion piece published ahead of Wednesday’s figures.
“There are more people working in Australia than before COVID started… a feat that has not been achieved by any other major advanced economy.”
However, Australian confidence has been hit by the COVID-19 lockdown in Melbourne, a concern for retailers.
The Westpac-Melbourne Institute’s consumer confidence index fell a further 5.2% in June and 9.7% in two months.
Westpac chief economist Bill Evans said the initial 4.8% drop followed a sharp rise to an 11-year high in April and some disappointment with the federal budget, given expectations high that preceded the announcement.
“The latest drop in June is almost certainly due to concerns over the two-week lockdown in Melbourne,” Evans said, noting that the investigation was conducted in the first week of the lockdown.
However, AMP Capital chief economist Shane Oliver expects confidence to rebound following the announcement of the end of Melbourne’s foreclosure on Thursday evening, although some restrictions remain.
The RBA has kept its key spot rate at an all-time high of 0.1% since November of last year.
He has said on several occasions that he wants prices and wages to rise over the long term before raising interest rates, the latter being hit by a much lower unemployment rate.
However, such interest rate support has not been enough for some companies, which suffer from the lack of support from the JobKeeper wage subsidy which ended in March.
CreditorWatch’s analysis found that companies’ external administrations have increased by 24% in the past three months and that defaults have increased by 9%.
“We’ve been saying for some time that we won’t be able to get a true picture of the nation’s economic health until federal stimulus such as JobKeeper is completed,” CreditorWatch CEO said. , Patrick Coghlan.
Associated Australian Press