From Goldman:
The RBA’s long-standing reference to labour market conditions “warranting careful monitoring” was an interesting omission from the final paragraph of August’s RBA Board Minutes. Since April 2017, the RBA had framed its neutral policy stance as a “watching brief” over risks in the labour and housing markets – with “uncertainty” on the labour market referenced fairly consistently over most of the past year. Earlier this week, the RBA’s language on the labour market was upgraded a notch further.
The positive evolution in the RBA’s language on the labour market reconciles with the positive evolution of the data – the current expansion over 10 consecutive months is the longest unbroken stretch since 2011, 211k full-time jobs have been created since January, and a slew of alternative indicators are consistent with robust labour market conditions. Lead indicators also suggest strong momentum will continue, raising the prospect of an upgrade to the RBA’s assessment of domestic conditions over the coming months.
