The Reserve Bank will have a close eye on next week’s inflation data after unemployment only rose slightly in March.Credit:Louis Douvis
The Reserve Bank board has kept interest rates steady at 4.35 per cent since November as inflation has continued to fall while the unemployment rate has slowly crept up from near-historic lows. Over the same period,the economy has slowed,with onlystrong population growth preventing a recession.
RBA governor Michele Bullock warned the war on inflationwas not yet over after the board’s last meeting when it said it was not ruling any interest rate moves in or out in future meetings.
The unemployment rate has bounced around in previous months due to changes in working patterns,but in trend terms has remained at 3.9 per cent since November last year.
Moody’s Analytics economist Harry Murphy Cruise said it was clear the jobs market remained healthy.
“What makes the unemployment rate’s sturdiness particularly remarkable is that inflation has come down in leaps and bounds over the same period,” he said.
“In November,underlying inflation sat at 4.8 per cent,falling to 3.9 per cent in February – the most recent available data point. We expect further improvement in the March data due out next week.”