CANBERRA, AAP – Reserve Bank governor Philip Lowe will have another opportunity to explain the central bank’s policy intentions during a speech on the labour market.
Earlier this week, the RBA left the cash rate at a record low 0.1 per cent at its monthly board meeting.
Dr Lowe does not expect to raise it before 2024.
However, the RBA did tweak some of its policy support measures given the economy is recovering more strongly than anticipated.
The board remains committed to reducing unemployment, while wages growth of three to 3.5 per cent is also crucial to drive inflation into the two to three per cent target range.
Despite Dr Lowe’s stance, economists still expect the RBA to be in a position to lift the cash rate in 2023.
The governor’s speech on the labour market and monetary policy will be made to the Economic Society of Australia.
Dr Lowe regards full employment as a jobless rate closer to four per cent, compared to 5.1 per cent now, levels not seen since 2008 before the global financial crisis.
In a new report on the employment outlook, the Organisation for Economic Cooperation and Development says the recovery from the pandemic will take place in a context of profound transformation.
“While some jobs and activities are likely to return to their pre-pandemic ways, the persistent increase in vacancies requiring full-time home working confirms that business models are changing,” the OECD says.
“Certain tasks will either be taken over by machines or offshored, while new, often greener, jobs will be created.”
But the OECD says to allow people to better harness the opportunities brought about by such transformations, more upskilling and reskilling will be crucial.
There are already signs of skills shortages in some industries in the Australian economy.