Westpac Economics' Weekly Economic Update

Elliot Clarke

Westpac

This week saw the RBA take a less strident tone in its discussion of the AUD, with the currency now seen as "adjusting to the significant declines in key commodity prices"; previously, a further depreciation of the AUD was regarded as being both “likely and necessary”. The August Statement on Monetary Policy (released after filming) also included a relatively neutral set of forecasts (inflation in target band; growth firming to an above-trend pace in 2016/17), implying a desire to hold rates steady for a protracted period. Other data out this week was mixed. Real retail sales growth was stronger than expected in Q2; activity was broad based by store type but geographically narrow, being strongest in the south east. The July labour force outcome was a wild result, with 38k new jobs created but a 0.2ppt rise in the unemployment rate to 6.3% also seen due to stronger participation. That 30k of the 38k total jobs gain occurred in NSW highlights the reliance of aggregate jobs growth on the south east.


Elliot Clarke
Elliot Clarke
Senior Economist
Westpac

An Economist based in Sydney Australia with a particular interest in macro-financial analysis of the Australian and global economy. Having spent a number of years with the Reserve Bank of Australia and Westpac Economics, monetary policy, the...

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