RBA SoMP chicken hawks it

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The RBA Statement on Monetary Policy is out and has chicken hawked it (rather sensibly) not raising the outlook much if at all:

It remains in Futureboom! high gear but some insight into how fragile this is comes with a special on labour market indicators:

As an adjunct to monitoring each of these indicators separately, they can be combined into a single measure, or ‘Labour Demand Index’ (LDI), using statistical techniques (Graph B3).5 A positive LDI points to above-average employment growth over the next one or two quarters, while a negative LDI points to below-average employment growth. Analysis by Bank staff has found that the forecast accuracy for near-term employment growth is improved by using the LDI, compared with using any one of its component indicators. However, to understand movements in the LDI, it remains important to monitor and understand each of the component indicators. On balance, the LDI and its component indicators point to above-average employment growth over the next quarter or two. This is consistent with recent above-trend GDP growth and our expectation that it will continue to be above trend over the near term.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.