HALISTER1: Goldman Sachs Sees RBA on Hold Until 2018 Despite Jobs Miss

Goldman Sachs Sees RBA on Hold Until 2018 Despite Jobs Miss

(Bloomberg) -- Labor market dynamics are not weak enough to warrant a further policy response. Particularly given tentative signs of a positive transition point following an extended period of very weak growth in wages, broader incomes and corporate profits, writes Goldman Sachs’ chief economist Tim Toohey in note today.
  • Broad sweep of evidence points to reasonably resilient conditions in the Australian labor market; nothing alarming enough to draw RBA into further easing in the near term
    • GS sees RBA cash rate on hold until 1Q 2018
  • Expects unemployment rate to rise to 5.8% by 1Q 2017, before gradual decline to 5.6% by 4Q 2017
  • NOTE: Jobless rate declines as fewer people seek work
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Source: BFW (Bloomberg First Word)

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Tim Toohey (Goldman Sachs Group Inc/The)

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