Following last week's interest rate hike, CBA has made a substantial downward revision to its growth forecasts, now expecting GDP growth to 2.3 per cent by the end of 2022, and lower again for 2023.
The unemployment rate is now expected to edge back higher to 4½ per cent in 2023.
Despite anecdotal reports of wages rising quickly, to date the wage price index is only showing growth of 2.4 per cent.
CBA expects wages growth to reach 3¼ per cent, although of course this is still negative real wages growth.
CBA now expects the cash rate to reach 2.10 per cent - higher than previously expected - but deems that to be a contractionary setting, and sees the cash rate falling from there in 2023.
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New home sales, a leading indicator for residential construction fell 5.5 per cent last month (HIA).
The latest weekly payrolls figures were also soft - again - with total wages down -2.6 per cent over the month.
Source: ABS
No wage price spiral in evidence here.
