RBA – There’s a black cloud on the horizon

Our regular Q&A columnist, Greg McKenna, the Markets & Economics Correspondent for Business Insider Australia gives us his insights into the latest RBA minutes.


The minutes from the November RBA board meeting are out and in what is one of the more upbeat assessments of the conversation around the board table in some time, there is one curiously disturbing highlight – the bank doesn’t seem to know what’s going on Australia’s jobs market.

On the positive side, the minutes reflect an upbeat tone around inflation, both here in Australia and around the globe. The minutes also show that the positive shock from the improvement to Australia’s terms of trade meant “a more positive outlook for nominal growth in the Australian economy”.

The wash up is an economy that is expected to grow close to potential in the coming quarters before accelerating above potential later in the forecast period.

It all sounds like a central bank that is very happy with official rates at 1.5% and, even with the potential “complication” of a higher Australian dollar, disinclined to ease further.

Not so fast though. There is a disturbing question overhanging Australia’s jobs market.

You can read the rest of Greg’s article on Business Insider here …


Greg McKenna is an economist, trader and adviser. He runs his own consultancy and writes for Axitrader and Business Insider Australia. You can find him on Twitter @gregorymckenna or at www.gregmckenna.com.au

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