Weak labour market to keep price pressures subdued

Weekly payroll data suggest that the recovery in employment has started to go into reverse and we now expect the unemployment rate to climb to 8.5% in Q3. We believe that the huge amount of slack in the labour market will push underlying inflation much further below the RBA’s 2% target than the Bank is currently anticipating. The upshot is that the Bank has more work to do.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.


Free. 10 articles. No card required.
By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.

Already a client or trialist? Log in to read this.