Statement on Monetary Policy - AUGUST 2022 - Reserve Bank of Australia
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Statement on
Monetary
Policy
AUGUST 2022Statement on Monetary Policy
AUGUST 2022
Contents
Overview 1
1. The International Environment 5
2. Domestic Economic Conditions 19
3. Domestic Financial Conditions 29
4. Inlation 43
Box A: Recent Developments in Energy Prices 53
5. Economic Outlook 57The material in this Statement on Monetary Policy was inalised on 4 August 2022. The next Statement is due for release on 4 November 2022. The Statement is published quarterly in February, May, August and November each year. All the Statements are available at www.rba.gov.au when released. Expected release dates are advised ahead of time on the website. For copyright and disclaimer notices relating to data in the Statement, see the Bank’s website. The graphs in this publication were generated using Mathematica. Statement on Monetary Policy enquiries: Secretary’s Department Tel: +61 2 9551 8111 Email: rbainfo@rba.gov.au ISSN 1448–5133 (Print) ISSN 1448–5141 (Online) © Reserve Bank of Australia 2022 Apart from any use as permitted under the Copyright Act 1968, and the permissions explicitly granted below, all other rights are reserved in all materials contained in this publication. All materials contained in this publication, with the exception of any Excluded Material as deined on the RBA website, are provided under a Creative Commons Attribution 4.0 International License. The materials covered by this licence may be used, reproduced, published, communicated to the public and adapted provided that the RBA is properly attributed in the following manner: Source: Reserve Bank of Australia 2022 OR Source: RBA 2022 For the full copyright and disclaimer provisions which apply to this publication, including those provisions which relate to Excluded Material, see the RBA website.
Overview
Inflation is high globally and has risen further in In Australia, inflation is now the highest it has
recent months. Strong demand, supported by been since the early 1990s and is expected to
monetary and fiscal stimulus, has come up peak at a higher rate than earlier envisaged.
against global supply capacity that continues to Global factors have contributed significantly to
be impaired by the COVID-19 pandemic. In this outcome, but domestic pressures are also
addition, some energy and food prices are playing a role. Headline inflation was
higher as a result of Russia’s invasion of Ukraine. 1.7 per cent (seasonally adjusted) in the June
Inflation has already reached 7–10 per cent in quarter and 6.1 per cent over the year. Higher
many economies and is expected to peak later prices for petrol again added to overall inflation,
and higher than previously thought. Unemploy- and the prices of fruit and vegetables rose
ment rates remain around generational lows in because of flooding on the east coast. Inflation
most advanced economies. pressures are broadly based; trimmed mean
The rapid increase in the cost of living is inflation remained high in the quarter at
reducing real incomes. High inflation has also 1.5 per cent, taking the year-ended rate to
led central banks to increase interest rates quite 4.9 per cent. Input cost pressures have lifted
quickly. Together, these developments are inflation for new dwelling construction,
weighing on the outlook for global growth. The consumer durables, groceries and some services.
slowing in growth is expected to be driven by A large share of the goods and services in the
an easing in household consumption growth. Consumer Price Index basket are seeing
Lower asset prices could also contribute to the annualised inflation above 3 per cent at present.
downward pressure on consumption. Consumer Inflation in Australia is expected to increase
confidence has fallen sharply in many countries further over the course of this year, reaching
and some timely indicators of growth in activity around 7¾ per cent in headline terms around
have begun to soften. the end of the year. Domestic retail gas and
Inflation has been boosted by high energy electricity prices are expected to increase by
prices, following Russia’s invasion of Ukraine. 10–15 per cent over the second half of 2022,
Further shocks to energy prices are possible, given the high global price of energy and recent
given the tensions ensuing from the invasion; disruptions in the domestic electricity market.
Europe is particularly exposed to the possibility Trimmed mean inflation is also expected to peak
that gas supplies will be further disrupted. As the around year-end, at about 6 per cent, as firms
global growth outlook has been revised lower, continue to pass transport and other non-labour
many non-energy commodity prices have cost pressures through to their own prices. As
reversed the increases that occurred in the wake supply constraints continue to ease, inflation is
of the invasion and are now back around their expected to decline over coming years, to be
levels at the beginning of the year. back around the top of the 2 to 3 per cent target
range by the end of 2024. One uncertainty
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 1affecting the outlook for inflation is the consumption spending and a recovery in
possibility that inflation expectations and the services exports. GDP growth is then expected
general inflation psychology shift, and lead to to slow to 1¾ per cent in each of the following
the higher inflation being more persistent. two years; these forecasts are lower than three
The domestic labour market is the tightest it has months ago. A higher cost of living, rising
been in many years. Employment growth has interest rates and declining housing prices are
been strong and the unemployment rate has expected to weigh on growth in spending, at
declined faster than earlier expected, to be the same time as growth in public demand
3.5 per cent in June – its lowest level in almost slows. Reflecting still-high commodity prices,
50 years. Underemployment has also declined Australia’s terms of trade are expected to remain
and the employment-to-population ratio and on a higher trajectory than previously forecast,
participation rate are both at record highs. even as they decline from a likely historical high
Leading indicators of demand for labour remain in the June quarter.
strong. Job vacancies and advertisements are at The competing forces of a tight labour market
exceptionally high levels. Many employers have (and so strong labour incomes) and cost-of-
reported in liaison and business surveys that living pressures on household incomes make
they plan to increase headcount further but are the outlook for consumption unusually
finding it harder to do so. The unemployment uncertain. Employment growth could be
rate is expected to decline a little further still, to stronger than expected, and strong household
3¼ per cent in late 2022, which is lower than balance sheet positions could support
was previously forecast. It is then expected to household consumption by more than
increase gradually as economic growth slows. anticipated. Alternatively, a decline in real
The tight labour market is expected to result in incomes for the average household could weigh
stronger wages growth over the period ahead, on spending more than expected, particularly if
but growth in labour costs is expected to be household wealth is also declining. Many
below the rate of inflation for a time. An households should be well placed to absorb
increasing share of firms in liaison and business higher prices and interest costs without
surveys have reported that they are paying significantly curtailing consumption. However,
larger wage increases this year, including there are some households that will be more
because of the recent decision by the Fair Work budget constrained in the period ahead,
Commission on minimum and award rates of particularly those with low savings buffers and
pay. Recent high inflation outcomes have also high debt.
been a factor in some recent wage negotiations. The slowing housing market represents a
Broader measures of labour income growth are headwind for household consumption.
expected to increase faster than the Wage Price Established housing prices have been declining
Index over the forecast period, as workers switch for some months in Sydney and Melbourne, and
jobs in pursuit of higher pay and employers use more recently in a wider range of cities and
non-wage remuneration such as bonuses to regions. The resulting wealth effects are
attract and retain staff. expected to dampen growth in household
The Australian economy has been resilient to the consumption; however, it is noteworthy that
disruptions caused by the Omicron outbreaks these falls follow a substantial run-up in prices
and floods on the east coast, and grew strongly over the preceding 18 months. New lending for
over the first half of this year. GDP is forecast to housing has also eased in recent months but
grow by 3¼ per cent over 2022, supported by remains at high levels. Dwelling investment is
2 R E S E R V E B A N K O F AU S T R A L I Alikely to be supported for at least the next year been broadly consistent with global develop-
by the large pipeline of detached house ments. The Australian dollar has appreciated of
construction projects that are currently late, largely reversing the depreciation over
underway. Capacity constraints and weather- preceding months.
related disruptions have limited the pace at The risks to the global outlook are skewed to the
which this pipeline can be worked down, downside. Inflation is high in many economies
however. Further out, the outlook for dwelling and increasingly driven by domestic demand
investment is softer as a result of the pressures. The longer high inflation persists and
combination of declining housing prices, higher the more expectations adjust, the more
interest rates and high construction costs. monetary policy might need to be tightened. In
The outlook for investment more broadly doing so, central banks are having to weigh up
remains positive, although capacity constraints the need to rein in inflation and contain inflation
are evident in some areas. Survey measures of expectations against the weakening outlook for
business conditions are strong and business growth. The synchronised nature of the
credit is growing rapidly. The pipeline of non- tightening in monetary policy globally could
residential construction projects has increased prove quite contractionary, and is occurring at a
recently, and surveys and liaison information time when fiscal policy is offering less support.
about non-mining firms’ investment intentions As in Australia, it is also unclear how firms and
imply that machinery and equipment households will respond to real incomes
investment will grow over the period ahead. declining at the same time that labour markets
Public investment is expected to increase over in most advanced economies remain tight.
the forecast period, but as for private-sector On the supply side, further shocks to global
construction activity, it is likely to face capacity energy supply could adversely affect both global
constraints. Public consumption is likely to grow growth and inflation. In addition, restrictions to
more slowly than the rest of the economy, as control the spread of COVID-19 in China led to
pandemic-related spending unwinds. an unexpectedly large contraction there in the
Financial conditions globally have tightened June quarter; further outbreaks could both
noticeably from their unusually accommodative weigh on growth in China and disrupt global
levels at the start of the year. Many advanced supply chains. The Chinese economy is also
economy central banks have increased policy contending with weak property market
interest rates by more than earlier anticipated. conditions and increasing levels of distress
These moves have been motivated by the need among developers.
to reduce the risk that high inflation becomes Over the course of this year, inflation in Australia
entrenched, which would require a larger and has been higher than was previously expected
more costly tightening in policy later on. and the labour market has tightened faster than
Emerging market central banks have also was thought likely, with the unemployment rate
continued to tighten policy, with a number in now standing at 3½ per cent. In this
Asia starting to raise rates over recent months. In environment, there is a risk that expectations of
line with the weaker outlook for global growth, high inflation might be built into price- and
equity prices have fallen over the course of this wage-setting behaviour, making the higher
year and credit spreads have widened. Longer- inflation more persistent. At the same time, the
term government bond yields have also outlook for both the global and the Australian
reversed some of their earlier increases. economies has been downgraded, as central
Movements in Australian financial markets have banks raise interest rates and household
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 3budgets come under pressure because of higher balances to 1.75 per cent. The increases have
inflation. been required to create a more sustainable
In light of these developments and risks, the balance of demand and supply in the Australian
Reserve Bank Board has continued the process economy.
begun in May of normalising monetary The Board is committed to do what is necessary
conditions in Australia. During the pandemic, to ensure that inflation in Australia returns to the
the Board put in place very considerable 2 to 3 per cent target range over time. It is
monetary stimulus to help the Australian seeking to do this in a way that keeps the
economy through a very difficult period and economy on an even keel. The path to achieve
provide insurance against the worst outcomes. this balance is a narrow one and subject to
The strong recovery of the economy and the considerable uncertainty. The Board expects to
high inflation are requiring the withdrawal of take further steps in the process of normalising
monetary stimulus earlier, and faster, than monetary conditions over the months ahead,
previously expected. Accordingly, the Board but it is not on a pre-set path. The size and
followed up the initial increase in the cash rate timing of future interest rate increases will be
target of 25 basis points in May with three guided by the incoming data and the Board’s
increases each of 50 basis points in the following assessment of the outlook for inflation and the
three months. These increases have taken the labour market.
cash rate target to 1.85 per cent and the
remuneration rate on Exchange Settlement
4 R E S E R V E B A N K O F AU S T R A L I A1. The International Environment
Inflation has been at multi-decade highs in most and monetary policy stimulus being removed
economies over recent months, and is broadly more quickly than was anticipated by financial
based. High core inflation reflects strong markets a few months ago, the outlook for
demand coming up against the limits on supply global GDP growth is weaker. Revisions to
of labour and goods; headline inflation is even forecasts have been largest for the United States,
higher due to commodity prices having with many forecasters now predicting a mild
increased over the past year. There is no sign as recession there in 2023. The risks to European
yet that core inflation is moderating. However, growth have also increased due to rising
commodity prices have fallen in recent weeks concerns about the supply of Russian energy.
and global supply constraints have started to And economic activity in China is forecast to be
ease. Both factors, if sustained, should reduce well below earlier expectations because of the
the pressure on inflation over the coming year. impact of ongoing COVID-19 containment
Central banks have responded to high inflation measures there. Overall, growth in Australia’s
by removing some of the substantial policy major trading partners is now expected to be
stimulus put in place during the COVID-19 notably below its pre-pandemic average in the
pandemic. The increases in policy rates by next two years.
central banks in advanced economies have
been relatively quick compared with the past Inflation is broadly based, persistent
and are intended to reduce the risk that above- and at multi-decade highs …
target inflation becomes embedded in inflation Consumer prices have risen sharply and by more
expectations. In regard to emerging markets, than expected over the past year in most
some central banks in Asia have begun to economies, underpinned by limited spare
increase policy rates in recent months, while capacity, supply constraints in goods markets
central banks in other regions have been doing and higher commodity prices. Monthly headline
so for some time. Largely reflecting the actual inflation has been consistently higher than core
and expected reduction in the extent of policy inflation of late, as food and energy prices
stimulus, government bond yields have risen (which are excluded from core inflation
substantially in most economies since the start measures) have risen substantially (Graph 1.1).
of 2022, equity prices have declined and credit Core inflation has been high and broadly stable
spreads have widened. The US dollar has in monthly terms in most economies, and is yet
appreciated notably this year, while the to show signs of easing.
currencies of many other advanced economies The persistence of high core inflation reflects
and emerging economies have depreciated. rising services inflation offsetting a gradual
Global demand has so far remained resilient, but moderation in goods inflation in some
there are increased concerns about the outlook economies (Graph 1.2). Services inflation has
for the global economy. With inflation higher increased in most economies, underpinned by a
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 5recovery in the demand for services, faster Inflation expectations for the year ahead have
wages growth and increasing prices for increased sharply in response to recent high
commodities used as inputs (e.g. food and fuel). inflation outcomes (Graph 1.3). Households’
The increase in services inflation in advanced inflation expectations for the year ahead are
economies has been broadly based across now at their highest level since the early 1980s
categories, but has been particularly strong for in many advanced economies. By contrast,
recreational services and rents. By contrast, households’ expectations for inflation in the
goods inflation has begun to moderate in the medium term have only increased to levels
United States and the United Kingdom from its commonly recorded before 2012. Business
earlier rapid pace; this moderation is evident in a survey and financial market measures also
range of items, but especially for vehicles, which suggest that inflation is expected to moderate
recorded very sharp price increases earlier in the substantially in coming years, to ranges broadly
pandemic. Goods inflation in the euro area is yet consistent with central bank targets (discussed
to show similar signs of moderation (perhaps further below).
partly because it didn’t rise as high as in these
other economies). … prompting central banks to raise
policy rates quickly
Central banks in most advanced and emerging
Graph 1.1 economies have increased their policy rates in
Consumer Price Inflation recent months to address high inflation and the
Monthly
% United States Euro area % risk of this becoming entrenched in longer term
2 2 inflation expectations. The increases in policy
Core
1 1 rates have been relatively rapid compared with
0 0 the past for many advanced economy central
Headline
% %
banks. Most of these central banks have
United Kingdom Canada
2 2 continued to gradually reduce their holdings of
1 1 assets purchased under quantitative easing
0 0 programs. The European Central Bank (ECB)
-1 -1 ended net purchases under its asset purchase
2020 2022 2020 2022
Sources: RBA; Refinitiv program in July. The Bank of Japan (BoJ) is now
Graph 1.2 Graph 1.3
Household Inflation Expectations
Core Consumer Price Inflation % %
Six-month annualised Year-ahead Medium-term*
% United States Euro area % 6 6
12 12 United States
Goods
8 8 5 5
Services
4 4 4 4
0 0
3 3
% United Kingdom Canada %
12 12 2 2
8 8
1 1
4 4 United Kingdom
0 0 0 0
2002 2012 2022 2002 2012 2022
-4 -4 * Expected annual inflation 5–10 years in the future; derived from
2018 2022 2018 2022 surveys.
Sources: RBA; Refinitiv Source: Refinitiv
6 R E S E R V E B A N K O F AU S T R A L I Athe only major central bank adding to its bond appropriate at upcoming meetings. The ECB
holdings. also announced the Transmission Protection
Central banks in most advanced economies Instrument, under which it can undertake
have signalled that further increases in policy targeted purchases of euro area government
rates are likely to be needed to return inflation to bonds to support the smooth transmission
target levels. Some central banks have discussed of monetary policy across all euro area
the possibility that policy rates may need to rise economies.
to restrictive levels – that is, above estimates of • At its meetings in May and June, the Bank of
the longer run neutral rate – within the next year England (BoE) increased its policy rate by a
or even sooner. Market pricing suggests that cumulative 50 basis points to 1.25 per cent.
policy rates will peak in the first half of 2023 at The BoE noted that it will be alert to
levels considerably higher than at the onset of indications of persistent inflationary
the pandemic (Graph 1.4). Movements and pressures and will act forcefully if necessary.
projections by central banks have included the Among other advanced economies, Sveriges
following: Riksbank, Norges Bank and Swiss National Bank
• At its meetings in June and July, the US all raised their policy rates by 50 basis points in
Federal Reserve (Fed) increased the target June (to 0.75, 1.25 and −0.25 per cent,
range for its policy rate by a cumulative respectively), while the Bank of Korea has raised
150 basis points to 2.25 to 2.5 per cent. In its policy rate by a cumulative 75 basis points
June, median projections from Fed policy- since May to 2.25 per cent. By contrast, the BoJ
makers indicated that the policy rate would continues to signal that it will keep its
reach around 3.8 per cent by the end of accommodative policy settings in place until it
2023. More recent commentary from sees evidence of inflation moving sustainably to
individual policymakers has emphasised the its target level.
need to move the policy rate to a restrictive The central banks of most emerging market
setting quickly. economies have also increased policy rates in
• In June and July, the Bank of Canada (BoC) response to persistent and higher-than-
increased its policy rate by a cumulative expected inflation (Graph 1.5). Inflation now
150 basis points to 2.5 per cent. The BoC said exceeds central banks’ targets in many Asian
that it was frontloading increases in its policy economies. Some central banks in Asia –
rate but still expected to raise it further, with
decisions dependant on developments in
Graph 1.4
economic data.
Policy Rate Expectations*
% %
• At its June and July meetings, the Reserve 4 4
Bank of New Zealand (RBNZ) increased its 3 3
US
2 2
policy rate by a cumulative 100 basis points May SMP NZ
1 1
to 2.5 per cent. It projects that its policy rate 0 0
Japan Euro area
% %
will peak at close to 4 per cent in 2023. 4 4
3 3
• At its meeting in July, the ECB raised its key 2
Canada
2
Australia
policy rates for the first time in 11 years, with 1 1
UK
0 0
its deposit facility rate rising by 50 basis -1 -1
2019 2021 2023 2019 2021 2023
points to 0 per cent. It indicated that further * Dashed lines show expectations implied by overnight indexed
swap rates.
increases in its key policy rates will be Sources: Bloomberg; RBA
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 7including the central banks of Malaysia, the Expectations for substantially higher policy rates
Philippines and India – have tightened policy in and the drag from high inflation on real
recent months, while the Bank of Thailand and household incomes are weighing on forecasts
Bank Indonesia are expected to begin raising for growth in advanced economies. This is
rates in the September quarter. In Latin America, particularly the case for the United States, where
where inflation has been high for some time, the the policy rate is expected to increase by more
central banks of Chile, Brazil and Mexico have all than in many other economies over the
raised policy rates further, citing concerns tightening cycle; US GDP growth forecasts for
around the potential for inflation expectations to both 2022 and 2023 have been downgraded by
increase. Central bank guidance and market 1½ percentage points since May. Many
implied rates suggest that monetary policy will forecasters expect US GDP to contract in 2023,
be tightened further across emerging market but not by much; forecasts for the unemploy-
economies throughout the remainder of 2022. ment rate are only modestly higher than the
current very low level. Forecasts for growth in
Global growth is forecast to slow most other G7 economies have also been
significantly revised down a little further in recent months;
Growth in Australia’s major trading partners is expectations for growth in Europe are now well
expected to fall well below its pre-pandemic below those anticipated at the start of the year.
average this year, before picking up modestly in Forecasts for growth in China have also been
2023. This follows very strong outcomes in revised markedly lower for 2022, because of the
2021 as most economies bounced back from impact of measures to contain the spread of
the initial economic effects of the pandemic. COVID-19 on growth in the June quarter. Fiscal
Since the May Statement, the forecast for year- support is expected to see infrastructure
average GDP growth in 2022 has been revised investment increase substantially over the
lower by around ¾ of a percentage point, to remainder of the year, and monetary policy
3 per cent. The forecast for year-average GDP remains accommodative. Nonetheless, it is
growth in 2023 remains unchanged at unlikely that the scale of stimulus will be
3¾ per cent. The risks to these forecasts are sufficient to meet the Chinese Government’s
skewed to the downside. full-year growth target.
Graph 1.5
Policy Rates in Emerging Markets Graph 1.6
% %
Expected policy rate in February 2023
GDP Growth Forecasts
Current policy rate Year-average
Policy rate at time of May S ta te me nt % %
United States Other G7 China Other Asian
economies economies*
10 10
8 8
Current
6 6
5 5
4 4
Previous
0 0 2 2
Indonesia*
Thailand
Malaysia
India
Mexico
Chile
Brazil
South Africa
Philippines
0 0
2021 2023 2021 2023 2021 2023 2021 2023
* Exports-weighted average of major Asian economies excluding
* Expected policy rate unavailable for Indonesia. Japan and China.
Sources: Bloomberg; Refinitiv Sources: ABS; CEIC Data; Consensus Economics; RBA; Refinitiv
8 R E S E R V E B A N K O F AU S T R A L I AThe outlook for global growth is subject to a factors complicate the challenge central
considerable degree of uncertainty, with the banks face in calibrating the extent of
balance of risks skewed to the downside. The tightening required.
key uncertainties are: • Further adverse shocks to the supply of goods,
• High inflation could prove to be even more including commodities, are possible. One
persistent than expected, requiring a larger potential source of disruption is if the supply
monetary policy tightening. Inflation could of energy or food commodities from Russia
persist if supply remains more constrained and Ukraine is further reduced, either
than currently envisaged or if recent high because of escalating conflict or a deliberate
inflation outcomes lead to changes in price- decision by Russia to stop supplying Europe.
and wage-setting norms that are The potential impact on prices could be
inconsistent with inflation targets, sharp, given the limited alternative sources
particularly in economies with limited spare of supply in world commodity markets.
capacity. In this context, the risks to the Moreover, the likely impact on the European
inflation outlook from any further adverse economy of a sharp reduction in Russian gas
supply shocks could be amplified, requiring flows to Europe is sizeable. Another potential
a larger monetary policy response than source of disruption is the prospect of
currently expected. On the other hand, further COVID-19-related lockdowns in
inflationary pressures could ease more China, which could limit the production and
quickly than assumed if global supply rises transport of Chinese manufactured goods
or demand eases faster than projected. and disrupt global supply chains. This risk
• It is unclear how household spending will has increased due to the high transmissibility
respond to the decline in real disposable of recent strains of COVID-19 and the
income from high inflation and tighter Chinese authorities’ ongoing commitment
monetary policy. It is possible that strong to suppressing the virus. Alternatively, the
growth in employment will continue to trigger for supply shortages to persist could
support real household incomes and that be entirely unforeseen; the current tightness
households will be comfortable in further in global goods markets means even small
reducing their rate of saving from current disruptions could have sizeable effects.
income and/or run down some of the stock
of savings accumulated during the Some indicators suggest global demand
pandemic. If so, household consumption is beginning to ease …
could be stronger than otherwise. On the Economic growth in advanced economies looks
other hand, household indebtedness has to have picked up in the June quarter, after a
increased over the past decade in a number weak outcome in the March quarter (Graph 1.7).
of economies, which might cause higher However, GDP in Australia’s trading partners as a
interest rates to slow consumption more whole contracted in the quarter, given the
rapidly than in past policy tightening cycles. COVID-19-induced decline in Chinese economic
The simultaneous cessation of fiscal and activity (discussed below).
monetary stimulus in many economies In advanced economies, consumer spending
could also have a larger effect than has continued to drive demand, despite the
envisaged. Declines in housing prices and pressures on households’ real disposable
building activity could also weigh more on incomes and sharp falls in consumer confidence
spending than currently assumed. These (Graph 1.8). Retail sales volumes have dropped
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 9only slightly in recent months, and are still well contractionary territory in July. Demand for
above pre-pandemic levels. Indicators of housing in the United States has also weakened,
spending on discretionary services – such as with home sales around 20–30 per cent lower
dining, travel and recreation – have continued to than at the start of the year. Demand for labour
lift. These outcomes are being supported by a remains very strong, but there are also early
decline in saving rates from unusually high signs that it may be starting to ease: vacancy-to-
levels, along with support to incomes from unemployment ratios are now decreasing
strong employment growth and fiscal initiatives slightly in some advanced economies, and US
targeted at mitigating cost-of-living pressures. firms are reporting that it has become a little
Nonetheless, some timely indicators suggest easier to fill vacancies (while workers are saying
that economic growth in advanced economies that it is slightly harder to find a job). Forward-
may have peaked (Graph 1.9). PMI survey looking indicators, such as investment
measures of output and new orders fell intentions, are also softening.
significantly in June and moved into
… while demand in China is recovering
from recent lockdowns, supported by
Graph 1.7 fiscal and monetary policy
Australia’s Major Trading Partner GDP*
Exports-weighted quarterly growth The Chinese economy contracted by
% %
2½ per cent in the June quarter. This was
significantly weaker than expected and reflected
4 4
containment measures to slow the spread of
COVID-19 in Shanghai, Beijing and elsewhere.
0 0
Recent lockdowns in China have generally been
stricter than those seen in other countries.
-4 -4
Nonetheless, the Chinese economy recovered
quickly over the course of the quarter as new
-8 -8
2019 2020 2021 2022 locally transmitted COVID-19 case numbers
Total Advanced economies China Other major trading partners
* Forecasts used where June quarter 2022 GDP has not yet been reported.
declined and activity restrictions were eased.
Sources: ABS; CEIC Data; Consensus Economics; RBA; Refinitiv
Retail sales recouped most of their April decline
Graph 1.8 Graph 1.9
Consumption Indicators
index Retail trade volumes Consumer confidence* index United States – Economic Indicators
points index Output PMI* Vacancies-to-unemployment ratio
2019 = 100
120 20
50 2
United States Manufacturing
110 10
35 1
100 0 Services
Euro area index index
Home sales** Investment intentions***
90 -10 120 20
Other**
100 0
80 -20
80 -20
70 -30
2020 2022 2020 2022 60 -40
2020 2022 2020 2022
* Deviation from long-run average; United States is an average of
* Purchasing Managers’ Index.
Conference Board and University of Michigan.
** ** New and existing home sales; 2015–2019 = 100.
GDP-weighted average of Japan, United Kingdom, Canada, Denmark
and Sweden; most recent observation is estimated based on available *** Average of regional Federal Reserve surveys of capital expenditure
data. expectations; deviation from post-1990 average.
Sources: RBA; Refinitiv Sources: RBA; Refinitiv
10 R E S E R V E B A N K O F AU S T R A L I Aover May and June (Graph 1.10). With construction; in turn, some home buyers are
population mobility holding firm in July, to be withholding related mortgage payments, which
around prior levels across the country, it is likely has affected a number of residential projects
that consumption will remain high in July. across China. Authorities have reportedly
The real estate sector has been a significant drag approved a fund to support selected property
on the Chinese economy over the past year developers to complete projects.
(Graph 1.11). Activity has been constrained by In response to the weakening economy, Chinese
restrictions on developer financing authorities have increased a wide range of fiscal
compounded by restrictions on movement to support measures, while maintaining
deal with outbreaks of COVID-19. Various policy accommodative monetary policy (Graph 1.12).
measures have provided some support: The government’s consolidated fiscal deficit was
mortgage rates and down-payment ratios on around 4 per cent of GDP wider over the first
new property have been reduced, and govern- half of this year than in 2021, and close to the
ment vouchers have been introduced for the forecast for the full year set in March. The wider
purchase of new property in a number of cities. deficit owed to increased tax rebates, other
While this has supported a recovery in new measures to support business cash flows and
home sales in the largest cities, national housing subsidise rent and utility costs, and consump-
sales have been slow to pick up because tion vouchers to support retail sales in some
demand is still very weak in other cities. Real cities. Authorities have also accelerated public
estate investment has declined by about investment projects. Local governments issued
15 per cent from its peak in late 2020 and is their full annual quota of special bonds (which
likely to fall further. Expectations of further are typically tied to infrastructure projects) in the
weakness in construction contributed to recent first half of the year. Infrastructure investment
falls in Chinese steel and iron ore prices. has risen sharply in response, contributing
Subdued property market activity has around 2½ percentage points to growth over
exacerbated financial pressure on property the past year.
developers, particularly those that were already Authorities have also maintained the
highly leveraged and experiencing significant accommodative stance of monetary policy. The
stress. The deterioration in funding conditions five-year loan prime rate – a key mortgage
has led some developers to suspend reference rate that is an average of lending rates
Graph 1.10 Graph 1.11
China – Residential Property Market Indicators
China – Activity Indicators index Real construction* New housing prices %
index December 2019 = 100 Traffic congestion % Dec 2019 = 100 Six-month annualised growth
Seasonally adjusted Year-ended growth 120 20
120 20
100 10
Rest of China
110 10
80 0
100 0
index Starts Sales index
Dec 2019 = 100 Dec 2019 = 100
90 -10 130 130
Real retail sales
80 -20 100 100
Fixed asset
investment Beijing 70 70
70 -30
Shanghai
40 40
60 -40 2014 2018 2022 2018 2022
2020 2022 J F M A M J J A * Residential real estate investment excluding the purchase of land;
2022 deflated using producer price data.
Sources: CEIC Data; RBA; WIND Information Sources: CEIC Data; RBA
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 11reported by banks – has declined by 15 basis production and global demand for goods has
points since the previous Statement. The plateaued. Chinese export volumes have
People’s Bank of China (PBC) lowered the floor rebounded since April, to be well above levels at
on mortgage rates that banks can offer to first the start of 2022, as authorities resolved
home buyers but have left other key lending disruptions to the movement of goods between
rates unchanged. Money market rates have cities and relaxed restrictions on manufacturing
remained low, reflecting the PBC maintaining activity (Graph 1.14). Chinese industrial
high levels of liquidity. Chinese Government production has also mostly retraced its earlier
bond yields have declined in line with money falls, led by a sharp recovery in the production of
market rates, and equity prices rose over May automobiles, machinery & equipment and
and June alongside an easing in mobility computing. Likewise, production in east Asia has
restrictions. Relatively looser financial conditions grown since late 2021, in response to capacity-
in China contributed to a small depreciation in enhancing investment since 2020. However,
the renminbi against the US dollar since the there are likely to be ongoing periodic
previous Statement (Graph 1.13). Yields on restrictions on supply from China over coming
Chinese Government bonds remain below US months, as authorities continue to pursue a
Government bond yields and foreign investors policy of suppressing the COVID-19 virus.
have continued to reduce their holdings of Measures of supply chain pressures have
Chinese securities. continued to ease over recent months, though
Total social financing (TSF) has increased a little they remain elevated (Graph 1.15). Supplier
over recent months, supported by accommoda- delivery times have declined to their lowest level
tive fiscal and monetary policy conditions, but since late 2020 and backlogs of work have
household demand for credit remains subdued. eased, leading to a fall in survey measures of
global input prices since their peak in June.
Supply constraints in global goods Shipping contract rates have remained at high
markets are beginning to ease … levels because of ongoing shortages in the
Supply constraints have shown signs of easing supply of vessels available to charter as well as
as the supply of goods from China and east Asia high oil prices. However, contract rates are no
has recovered from earlier COVID-19 disruptions, longer rising and container spot rates from
strong investment has expanded east Asian China have fallen noticeably over recent months.
Graph 1.12
China – Fiscal Impulse
Graph 1.13
% CNYtr
Fiscal balance* Infrastructure investment Chinese Exchange Rates
Annual as a share of GDP Quarterly yuan
index
0 6.0
116 6.2
Yuan per US$
-2 5.5
(RHS, inverted)
112 6.4
-4 5.0
First half 108 6.6
-6 4.5
104 6.8
Second half
-8 4.0 Trade-weighted index*
(LHS)
100 7.0
-10 3.5
2018 2022 2018 2022
*
96 7.2
Consolidated measure that includes central government, local 2020 2021 2022
government and government funds; as a share of previous year
nominal GDP. * Indexed to 1 January 2020 = 100.
Sources: CEIC Data; RBA Sources: Bloomberg; China Foreign Exchange Trade System; RBA
12 R E S E R V E B A N K O F AU S T R A L I AImproved supply has allowed a recovery in US prior months, when refinery margins had
retailers’ inventory-to-sales ratios for goods other widened to historical highs. Oil prices have
than vehicles. Semiconductor supply has also continued to be supported by sanctions on
improved, but shortages continue to restrict Russian oil, heightened uncertainty around
production for some automobile producers. future Russian supply, and limited spare
extraction and refinery capacity. Prices of
… and some commodity prices are agricultural products and inputs have also fallen
now falling noticeably of late, to be back to their levels at
After rising strongly for many months, crude oil the beginning of the year. Wheat prices have
prices have fallen materially since mid-June as fallen, and are now around 35 per cent below
concerns increased around the outlook for their recent peak, as favourable weather
global growth (Graph 1.16; Table 1). Prices of conditions raised expectations for end-of-
refined oil products in north Atlantic markets summer harvests in the northern hemisphere
have been more volatile; a noticeable fall in July and in anticipation of the resumption of
has partially retraced the sharp rise seen over Ukrainian and Russian grain exports. The decline
in both oil and food prices, if sustained, is likely
to alleviate pressure on headline inflation over
Graph 1.14 coming months.
Asian Exports and Production
2019 = 100 Base metal prices have similarly declined over
index index
Export volumes* Industrial production
recent months, in response to increased
150 120 concerns about the outlook for industrial
China
activity. Iron ore prices have also reversed their
125 110
rise around the start of this year as concerns on
100 100 the outlook for the Chinese property sector have
Other east Asia**
increased, and as authorities reintroduced
75 90
measures to limit steel production (Graph 1.17).
50 80 By contrast, prices for gas and thermal coal have
2020 2022 2020 2022
* Deflated using US price deflator by import origin. increased sharply over recent months, adding to
** South Korea, Taiwan and Singapore.
Sources: CEIC Data; RBA; Refinitiv upward pressure on the cost of electricity and
Graph 1.15 Graph 1.16
Supply Indicators Commodity Prices
2012–2019 average = 100 US$/b index
Oil Wheat**
index Shipping costs* Semiconductor prices index
1,000 175 150 200
800 150 Refined oil products*
Contract 100 150
600 125
400 100 50 100
Spot Brent crude oil
200 75
index Natural gas** Thermal coal** index
index Delivery times PMI** US inventory-to-sales ratio index
1,000 400
30 175
China Europe
35 150 750 300
World excl Total excl
40 125 500 200
China vehicles Asia (spot LNG)
45 100 250 100
50 75
Vehicles 0 0
55 50 2020 2022 2020 2022
2019 2022 2019 2022 * Based on wholesale petroleum and diesel prices; weighted by the
* Contract refers to vessel charter cost; spot refers to container rate. typical share of output from one barrel of crude.
** Purchasing Managers’ Index (as reported); inverted scale. ** January 2019 = 100.
Sources: IHS Markit; RBA; Refinitiv Sources: Bloomberg; McCloskey by OPIS; RBA; Refinitiv
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 13Table 1.1: Commodity Price Growth(a)
SDR terms; percentage change
Since previous Statement Over the past year
Bulk commodities −24 8
– Iron ore −20 −36
– Coking coal −62 −3
– Thermal coal 17 201
LNG – Asia spot price 81 194
Rural −17 4
Base metals −14 1
Gold −5 5
Brent crude oil(b) −13 42
RBA ICP −12 22
– Using spot prices for bulk commodities −17 13
(a) Prices from the RBA Index of Commodity Prices (ICP); bulk commodity prices are spot prices.
(b) In US dollars.
Sources: Bloomberg; McCloskey by Opis; RBA
heating. The trigger for this has been reduced 15 per cent, and Germany and a number of
Russian supply to Europe and concerns that this other countries have announced plans to
could escalate and/or prove persistent, along reopen idle coal-fired generators, which has
with disruptions to supply due to maintenance driven thermal coal prices higher. Global prices
and problems at some LNG pipelines and of thermal coal have been supported more
terminals. While storage facilities in Europe are generally by high gas prices prompting gas-to-
now around 70 per cent full, these outages have coal switching in Asia and by supply disruptions
hampered efforts to reach the European in Australia due to heavy rains.
Commission’s target of 80 per cent by The rise in LNG and thermal coal prices are
November. In response, authorities have agreed expected to lift Australia’s terms of trade to its
to a (voluntary) target to cut gas use by highest level in many decades in the June
quarter (Graph 1.18). Futures prices suggest that
Graph 1.17 commodity prices will decline from there,
Metals Prices reducing Australia’s terms of trade (see chapter
January 2019 = 100
index index
on ‘Economic Outlook’).
300 300
Labour markets remain very tight and
250 250
Iron ore wages growth has picked up
200 200 Strong economic growth has seen unemploy-
150 150 ment rates fall to around generational lows in
most advanced economies (Graph 1.19). Low
100 100
Base metals unemployment rates in the United States and
50 50 the United Kingdom also partly reflect their
2019 2020 2021 2022
Sources: Bloomberg; RBA continuing low participation rates – almost
14 R E S E R V E B A N K O F AU S T R A L I A3 million Americans are still not participating in tations of tighter central bank monetary policy,
the labour force due to COVID-19 concerns. real yields have increased significantly this year.
However, labour supply in most other advanced Since mid-June, however, bond yields have
economies has recovered to, or above, pre- decreased following a weakening in the outlook
pandemic levels. The tightness in labour markets for global growth. Both real yields and market-
has resulted in nominal wages growth picking implied inflation expectations have eased. While
up, in some cases quite sharply, although not by market-implied expectations for inflation over
as much as inflation (Graph 1.20). Falling real the next year remain high, longer term expec-
wages and broad-based labour shortages are tations have declined to be in the 2–2½ per cent
contributing to industrial action becoming more range in most advanced economies
widespread and, in some countries, to growing (Graph 1.22).
calls for more wages to be indexed to inflation.
In some European countries, indexation is
already quite prevalent: in Belgium, virtually all
wages are indexed to inflation; in Spain, the
share of newly agreed collective bargaining
agreements with indexation clauses has Graph 1.19
approximately doubled this year, to around Unemployment Rates
Relative to 1990–2019 low
30 per cent. ppt ppt
2 2
Bond yields have increased substantially
over this year
1 1
Government bond yields have risen substantially
since the start of the year, reflecting persistently
0 0
higher-than-expected inflation data and expec-
tations that central banks will tighten policy
-1 -1
faster and to a greater extent in response
ea
a
lia
nd
n
Sw y
ea
om
k
en
D tes
ar
a
ad
pa
tra
w
ar
So ala
or
ed
a
U ingd
m
an
Ja
or
St
ni h K
s
en
o
(Graph 1.21). In many advanced economies, the
Ze
Au
N
C
r
d
Eu
K
ut
te
ew
d
ni
te
N
increase in bond yields has been larger for
U
Sources: RBA; Refinitiv
shorter term maturities. Consistent with expec-
Graph 1.18 Graph 1.20
Wages Growth*
Terms of Trade* Year-ended
2019/20 = 100 % %
index index Australia
Canada
4 4
120 120
2 2
100 100 New Zealand
United States
% %
80 80 United Kingdom
4 4
Euro area
60 60 2 2
0 0
40 40 2010 2016 2022 2010 2016 2022
1972 1982 1992 2002 2012 2022 * Labour cost indices used where available; compositionally controlled
* Includes RBA forecast for the June quarter of 2022. average earnings for Canada and the United Kingdom.
Sources: ABS; RBA Sources: BoE; RBA; Refinitiv; Statistics Canada
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 15Private sector financial conditions have Equity prices in most major markets have
tightened declined in recent months and are around
Conditions in corporate bond markets have 15 per cent lower than at the start of the year in
tightened substantially from their unusually the United States and Europe (Graph 1.24). The
accommodative levels last year (Graph 1.23). fall in equity prices owes, in part, to higher
Corporate bond yields have risen alongside an interest rates, which lower the valuations of
increase in government bond yields. In addition, future company earnings after discounting. The
credit spreads have widened, reflecting decline in equity prices is also likely to reflect
concerns about the economic implications of increasing concerns about the effect on profits
the withdrawal of accommodative monetary from rising interest rates and the prospect of a
policy. Credit spreads are now significantly slowdown in economic growth. Equity issuance
above the levels seen in the years immediately has been subdued since the start of the year in
prior to the pandemic. As yields have increased both the United States and Europe.
in recent months, issuance of sub-investment
grade bonds has declined, while issuance of
investment grade bonds has continued at a
moderate pace.
Graph 1.23
Graph 1.21 Corporate Bond Markets
Government Bond Yields % Yield (US dollar) Yield (Euro) %
% % 12 12
2-year 10-year
Sub-investment grade
4 4 9 9
NZ
6 6
3 3
US 3 3
Investment grade
2 2 bps bps
Spread (US dollar)* Spread (Euro)*
1,200 1,200
1 1
Australia 900 900
0 0 600 600
Japan
300 300
-1 -1
Germany
0 0
2018 2020 2018 2020 2022
-2 -2
2018 2020 2022 2018 2020 2022 * Spread to equivalent maturity government bond yield.
Sources: Bloomberg; Yieldbroker Source: ICE Data is used with permission
Graph 1.22 Graph 1.24
Inflation Expectations Equity Prices
Average rate implied over period by inflation swaps 1 January 2020 = 100
% % index index
Next 5 years 5–10 years ahead
4.0 4.0 United States
US 140 140
3.5 3.5
3.0 3.0 Japan
120 120
2.5 2.5
2.0 2.0 Europe
Australia 100 100
1.5 1.5
Euro area
1.0 1.0 UK
80 80
0.5 0.5
0.0 0.0 60 60
M J S D M J S M J S D M J S M J S D M J S D M J S
2021 2022 2021 2022 2020 2021 2022
Source: Bloomberg Source: Bloomberg
16 R E S E R V E B A N K O F AU S T R A L I AThe US dollar has appreciated heightened global growth concerns, tighter
The US dollar has appreciated further over global financial conditions and – particularly for
recent months and is around 6 per cent higher emerging Asian markets – a weaker outlook for
on a trade-weighted basis since the beginning China. The same factors have also contributed to
of the year (Graph 1.25). The appreciation over the depreciation of currencies in Asia over
the year to date is consistent with an increase in recent months (Graph 1.27).
US interest rates relative to those of many other
advanced economies. The Japanese yen has
reached new multi-year lows against the
US dollar as the BoJ continues to maintain very
accommodative monetary policy; this is in Graph 1.26
contrast with the Fed and other central banks, Emerging Markets – Financial Conditions
Excluding China and Russia
which are withdrawing stimulus. The euro has % Government bond yields* Government bond spreads** bps
10 Europe, Middle East 900
depreciated since Russia’s invasion of Ukraine, and Africa
Latin America
8 600
largely reflecting increased concerns about the
6 300
outlook for the euro area economy. Asia
index Equity prices*** Cumulative flows to funds**** %
150 6
Spreads on emerging market debt have 125 3
widened and capital outflows have 100 0
75 -3
picked up
50 -6
Spreads between US-dollar-denominated M J S D M J S D M J S M J S D M J S D M J S
2020 2021 2022 2020 2021 2022
emerging market government bonds and US * Local currency bonds, weighted by market value.
** US-dollar-denominated bonds; spreads to equivalent US Treasury.
*** 1 January 2020 = 100.
Government bonds have widened (Graph 1.26). **** Per cent of assets under management; includes flows to bond
and equity funds.
Net portfolio outflows from emerging markets Sources: Bloomberg; EPFR Global; IMF; JPMorgan; MSCI; RBA
have continued amid declining equity prices,
Graph 1.27
Graph 1.25
Emerging Market Currencies – Asia
Trade-weighted Exchange Rates Against the US dollar; 1 January 2020 = 100
1 January 2021 = 100 index index
index index Philippines
In
105 105
110 110 Thailand
105 105 100 100
US dollar
100 100 95 95
95 95 Malaysia
90 90
Euro Japanese yen India
90 90 Indonesia
85 85
85 85
80 80
80 80 M J S D M J S D M J S M J S D M J S D M J S
2018 2019 2020 2021 2022 2020 2021 2022 2020 2021 2022
Sources: Bloomberg; Board of Governors of the Federal Reserve System Sources: Bloomberg; RBA
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 1718 R E S E R V E B A N K O F AU S T R A L I A
2. Domestic Economic Conditions
Australian economic activity was resilient to the with an average of 21,000 in the 12 months to
disruptions caused by the Omicron outbreak of February 2020, despite population growth being
COVID-19 and the east coast floods in the first lower than before the pandemic.
half of 2022. Growth in domestic demand was Leading indicators suggest that demand for
robust in the March quarter and timely labour will remain strong in the months ahead.
indicators suggest momentum was sustained in Job vacancies and advertisements are at very
the June quarter. The labour market is tight and high levels and there are nearly as many
full-time employment growth has been strong. vacancies as there are unemployed people
Labour supply has been responsive to robust (Graph 2.2).
labour demand and the participation rate is at a
record high. Measures of spare capacity in the
labour market have declined to their lowest
Graph 2.1
levels in decades and many firms are finding it
Employment and Participation
challenging to hire workers. Strong labour % %
demand is supporting household income.
However, the headwinds to growth in activity 65 65
Participation rate
are strengthening. Households’ budgets have
come under increasing pressure from rising 60 60
prices, particularly for food and energy, and
higher interest rates. Consumer sentiment has 55 55
Employment-to-population rate
deteriorated sharply since the start of the year.
Housing prices have begun to decline alongside 50 50
1972 1982 1992 2002 2012 2022
weaker activity in the established housing Source: ABS
market, rising interest rates and the expectation
of further increases in the cash rate. Shortages of
Graph 2.2
materials and labour are an ongoing challenge
Labour Market Tightness
for some residential and infrastructure % %
investment projects.
80 80
Demand for labour is strong 60 60
Share of firms reporting suitable labour
Employment has grown strongly in recent as a severe output constraint
40 40
months, with the employment-to-population
ratio reaching a record high level of Vacancies-to-unemployment
20 20
64.4 per cent in June (Graph 2.1). Employment
0 0
increased by an average of 51,000 people per 1982 1990 1998 2006 2014 2022
Sources: ABS; NAB
month over the past three months, compared
S TAT E M E N T O N M O N E TA R Y P O L I C Y – AU G U S T 2 0 2 2 19The supply of labour has increased in term unemployment rate, which is typically
response … more representative of cyclical unemployment
Labour force participation increased to a record and so tends to be the most relevant for wages
high of 66.8 per cent in June. The rise in growth, is at its lowest level since the series
participation since the onset of the pandemic began in 1991.
has been broadly based, and particularly strong Hours-based measures of underutilisation have
for females and for people of both sexes aged also declined to multi-decade lows as firms
15–24 years and 55–64 years (Graph 2.3). In respond to demand by increasing the hours of
recent months, the youth participation rate existing staff. Many previously part-time
reached its highest level since the mid-1990s. employees have shifted into full-time work. Full-
The participation rate of young people is more time employment in June was 7 per cent higher
responsive to demand for labour than other age than its February 2020 level, while part-time
groups because they are less likely to be the employment was 0.6 per cent lower (Graph 2.5).
primary income earner in their household. The increased share of work that is full time has
Further, youth employment tends to be contributed to a rise in average hours worked to
concentrated in industries that are more around pre-pandemic levels. This is despite an
sensitive to general economic conditions, such elevated number of employed persons
as accommodation & food services and retail continuing to work fewer-than-usual hours due
trade. to illness.
… but labour market spare capacity has Hiring workers is becoming more
reached its lowest levels in decades challenging in the tight labour market
The labour market has continued to tighten in Hiring intentions reported by firms in surveys
recent months amid strong labour demand. The and the Bank’s liaison program remain strong.
unemployment rate fell to a near 50-year low of However, firms have also reported that finding
3.5 per cent in June and the heads-based suitable labour is a significant constraint on
underutilisation rate declined to 9.6 per cent – activity, with some expressing concerns about
the lowest rate since 1982 (Graph 2.4). Medium- achieving their desired increases in headcount
and long-term unemployment rates have in the tight labour market. Firms have
declined further in recent months; the medium-
Graph 2.4
Graph 2.3 Labour Underutilisation
Per cent of labour force
Participation Rates % %
Cumulative change since February 2020
ppt 15–24 years 25–54 years ppt
20 20
Underutilisation rate*
0 0
Male
Female 15 15
-5 -5
ppt ppt 10 10
55–64 years 65+ years
Unemployment
5 5 rate
5 5
0 0 Underemployment rate**
0 0
1966 1980 1994 2008 2022
-5 -5 * Sum of the unemployment and underemployment rates.
M J S D M J S D M J M J S D M J S D M J ** Employed persons who would like and are available to work
2020 2021 2022 2020 2021 2022 additional hours.
Sources: ABS; RBA Source: ABS
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