Research
How tight is the Australian labour market? And what does it mean for wages and inflation?
Trent Saunders, QTC Principal Economist
Published: 6 September 2022
6 min read
In this note, Trent investigates what measure of labour market slack is the best predictor of wages growth and inflation in Australia. I then assess what this means for the outlook over the coming year. I find that the job advertisements-to-unemployment ratio has historically provided the most accurate outlook, though other indicators provide similar insights. These indicators suggest that wages growth will pick up noticeably over the coming year.
Re-assessing Australia’s economic recovery
Trent Saunders, QTC Principal Economist
Published: 29 April 2021
6 min read
Australia’s economic recovery has been swift, with leading indicators suggesting that this rapid rate of improvement could continue in the coming months. In this article, QTC’s Principal Economist Trent Saunders uses three scenarios to project what this unexpected strength could mean for the economic outlook and the RBA’s cash rate decisions through to 2030.
What’s down with Australian inflation?
Trent Saunders, QTC Principal Economist
Published: 25 March 2021
5 min read
Inflation has remained stubbornly low in Australia over the past five years, with various cyclical headwinds and structural factors weighing against the stimulatory effects of historically low interest rates. These forces are likely to continue to weigh on inflation over the coming years, prolonging the time until we see an increase in the cash rate.
In this note, we take a closer look at what has underpinned low inflation outcomes to assess where we might need to see increases if inflation is to return to its target range. A key result is that low inflation over the past five years is largely explained by a weak labour market.
2030 Vision: Outlook for the economy and interest rates
Trent Saunders, QTC Principal Economist
Published: 18 February 2021
6 min read
In a world of uncertainty, it has proven difficult to see beyond short-term time horizons. In this article, QTC’s Principal Economist Trent Saunders explores Australia’s long-term path to economic recovery and alternate perspectives on how the economy and interest rates could evolve over the course of this decade. Using three scenarios and projections he takes a look at how the cash rate could move over the decade to 2030.