NAIRU lower
RBA Governor Lowe now believes NAIRU may be lower than 5 per cent.
Perhaps closer to an unemployment rate of 4½ per cent.
The relationships between unemployment and wages might not be so strong at the state level.
Nevertheless, it's interesting to note that New South Wales has had an unemployment rate under 4½ per cent since September 2018.
Nevertheless, it's interesting to note that New South Wales has had an unemployment rate under 4½ per cent since September 2018.
In fact, yesterday's reading was the lowest ever for the state, at just 3.9 per cent.
And yet still not much doing in terms of wages growth, or inflation.
Debelle noted that the economy would have to weaken 'a hell of a lot' - a phrase he seems rather fond of! - before the Reserve Bank would contemplate deploying quantitative easing (QE).
Presumably they'd want to use more conventional policy first.
Interesting and unusual times, to say the very least!
