WEEKEND ECONOMIST: Resilient consumers

The RBA is concerned that consumer spending will slow in the second half of the year as unemployment rises and the boost from the Government's cash payments fades. But research indicates consumers have ample savings to draw on.

In a clear shift of the policy bias, the August RBA Board meeting Statement replaced the phrase in the all important final paragraph "some scope for further easing of monetary policy" that was in the July Statement, with "the present accommodative setting of monetary policy is appropriate". That shift from an easing bias to neutral was taken a step further in the August Statement on Monetary Policy (SoMP), with the key introduction section's final paragraph noting "with the cash rate at an unusually low level and the global economy stabilising, movement towards a more normal setting of monetary policy could be expected at some point if further signs of a durable recovery emerge."


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