Wages only increased by 0.8 percent in the June quarter according to the latest data from the ABS, reducing pressure on the Reserve Bank of Australia to increase rates at its September board meeting.
Australia’s services sector continues to contract as the Federal Government’s fiscal stimulus dries up and the Reserve Bank’s interest rate increases impact the services sector.
New home sales slumped to a 17 month low in June, adding further weight to the case for the Reserve Bank of Australia keeping interest rates on hold at their board meeting tomorrow.
Julia Gillard has little to fear when the Reserve Bank of Australia Board meets in August, with a mid-campaign interest rate increase possible, but unlikely according to the minutes of the last RBA Board meeting.
Economists believe that yesterday’s positive ABS labour force data has increased the possibility that the RBA will look to tighten monetary policy as near full employment triggers inflation pressures.
The Reserve Bank of Australia has decided in it’s monthly board meeting today to leave interest rates on hold at 4.5 percent as it waits on second quarter inflation data from the ABS.
The services sector continues to contract, with a fall in new orders and decreasing selling prices keeping the services sector in negative territory in the June Performance of Services Index.
Australia’s banks may find themselves forced to cut discounts on home loan rates to avoid having to increase their standard variable home loan rates outside the RBA’s changes.
New housing construction is set to stall across Australia, with the brakes applied to the post-GFC recovery after a significant tightening of monetary policy by the Reserve Bank of Australia.
The June quarter 2010 ACCI-Westpac Survey of Industrial Trends showed a marked softening of manufacturers’ General Business Sentiment for the second half of 2010.
