RBA Assistant Governor (Economic), Christopher Kent speaking today in Sydney. The topic of his speech is Labour Market Developments.

Comments:

  • Unemployment to remain elevated over next two years, decline later in 2015
  • Labour market shows some signs of improvement
  • Still fair degree of spare capacity in labour market
  • Slowdown in wages has helped contain inflation, improve competitiveness
  • AUD is high by historical standards, particularly given recent fall in commodity prices

Headlines via Reuters

Full text: Cyclical and Structural Changes in the Labour Market

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More:

  • “The demand for labour has improved over recent months, although some of that may reflect a ‘catch-up’ after a period of weak employment growth last year”
  • “Despite these improvements, there is still a fair degree of spare capacity in the labour market”
  • “The unemployment rate is expected to remain elevated over that period, declining from later in 2015 when we anticipate GDP growth to be picking up to an above-trend pace”
  • “The downturn in mining investment has weighed on domestic demand, while the commensurate pickup in exports has been less labor-intensive”
  • On the labor supply side, much of the slowdown is likely to have had a cyclical element, although structural factors such as aging are also playing a role.”

Nothing of too much surprise here from Kent, and the AUD is not doing a huge amount in response, off just a few tics.