Home topics news News News Ideal jobless rate ‘some time away’: RBA Dynamic Business July 16, 2019 Reserve Bank of Australia board members agreed back-to-back cash rate cuts were necessary to eat into spare labour market capacity, but a high participation rate and an expanding working age population means it will take “some time” to achieve the ideal jobless rate. Minutes from the RBA’s July 2 meeting show members agreed a consecutive 25 basis point cut to a record low 1.0 per cent would help deliver a lower exchange rate and reduce interest payments on borrowing. This, members agreed, would hopefully free up more cash for households and businesses and stimulate the economy. But economists noted the central bank had inserted some conditionality into its outlook, pointing out that “the board will continue to monitor developments in the labour market closely and adjust monetary policy if needed”. Markets have already priced in a rate cut to 0.75 per cent by the end of the year, with some forecasting a reduction to 0.5 per cent by mid 2020. Notably, while board members agreed the global outlook remained “reasonable” in July, they refrained from using that term to describe the local economy following another month of mixed economic data. Underwhelming retail figures and continued wage stagnation weighed against improved business and consumer sentiment over the preceding month, while the May unemployment rate remained stubborn at 5.2 per cent. The minutes released on Tuesday also showed most of the strength in labour demand