Australian central bank grows in confidence, but consumer spending a major risk

Australian central bank grows in confidence, but consumer spending a major risk
Australia's central bank has become more confident about economic outlook in recent months, but weakness in consumer spending is a "major threat" between the slow income growth and the high debt level. Minutes of Reserve Bank of Australia (RBA) meeting showed policy-wise balanced inflation against higher domestic debt, while interest rate reached about 1.50% in almost 1-1 / 2 years. It is the earliest division of stable rates after the mid-1990s. The Tuesday shows that "the first year or more, the unemployment rate had fallen and the target was hit near inflation." "Recent figures have increased confidence, there will be more progress in this regard."
However, he also noted that slow labor growth in domestic consumption was developed by a thing of the global trend. "How far and strong conditions in the economy and labor market can open through the growth of higher labor and infrastructure development approaches are becoming key ideas."
The RBA has spent more than seven years without raising interest rates, official cash rates were introduced in the 1990s. According to the future of Interbank, the rate of record rate for the duration of this period at least one year may be here. <0 # YIB:> On December 5, the policy makers have received some enthusiastic signs, in which data from the third quarter's overall domestic product shows that the economy has been increasing at an annual speed faster than one year.
Retail sale of October also announced a cost-effective month for the sale of Christmas after the inflation activity. Last week's data shows that all the employment expectations for the 14th straight month of success in November increased past, the longest range of tension rising since the early 1990s. In addition, public spending on government infrastructure has promoted non-mining business investment and had been expected to develop economically for some time.
"In those situations, the additional capacity of labor market will be gradually absorbed and the development of labor is expected to end." However, despite the recent run-up of the better data yet, policy makers did not have enough to start raising rates. In the past month, the RBA mainly reduces its predictions for basic utility, which has been standing under its long term 2-3 target band for two years.
In addition, using the power of consumers' expense, only 2 percent annual wage is rising. In fact, domestic consumption increased by 0.1 percent in the third quarter, which has its smallest increase in 2008. The bank warned that "approach to home consumption has become a major threat, resulting in domestic income is gradually increasing and debt levels increase."