RBA July minutes released

The minutes from the RBA’s July meeting were released last week and, as expected, board members showed no signs of agitating for an increase in the official rate. Some interesting discussions took place regarding recent data on job vacancies which “suggested that demand for labour could be sufficient to maintain a stable or even falling unemployment rate”. The reason why it would be sufficient is because “employment had grown more rapidly than the population”. As the population grew less than previously, the weak economy was able to absorb the lower number of jobseekers. However, overall the RBA remains cautious because of the economy’s spare capacity, historically low wages growth and an unemployment rate higher than is desirable. The RBA does not expect non-mining investment to add to growth for some time but profits were rising and business conditions were a bit “above average” and improving. The general view of the minutes among financial institutions is summed up by Deutsche Bank that said, “The tone of the minutes in our view remains consistent with a mild easing bias”.