Reserve Bank of Australia (RBA) Assistant Governor (Economic) Sarah Hunter addressed the economic outlook during the Asian session on Wednesday, highlighting the impact of high interest rates on demand and the expected mild economic downturn.
Key Remarks:
The labour market remains tight compared to full employment.
Since late 2022, there has been a movement towards better balance in the labour market.
The easing seen in the labour market mirrors past mild downturns.
A reduction in average hours worked is anticipated as part of the slowing labour demand.
Employment is expected to rise, albeit at a slower rate than population growth.
There is room for a further decrease in job vacancies without a sharp increase in unemployment.
The strength in the participation rate has been surprising, especially in comparison to peer economies.
The economic outlook remains highly uncertain, with forecasts subject to potential inaccuracies.
Recent trends suggest that the easing in the labour market is starting to impact wage growth, which is likely past its peak and expected to slow further.
Market Reaction: In response to Hunter’s comments, the AUD/USD pair showed minimal movement, remaining within a range around the mid-0.6600s, near the 100-day Simple Moving Average (SMA). Traders are awaiting the upcoming release of the US Consumer Price Index (CPI) report before making further directional bets.
Related Topics:
