RBA holds interest rates at historic low level

The Reserve Bank of Australia (RBA) has left interest rates on hold at an historic low of 1.5% as widely expected and flagged that some "slowing in the year-ended growth rate is likely" before picking up again.
The RBA has cut rates twice this year, in May to 1.75 per cent and in August to its current historic low. The last time the official cash rate increased was November 2010.
All 64 economists polled by Reuters expected the RBA to keep rates on hold at today's meeting, the last of the year.

"Labour market conditions in the advanced economies have improved over the past year," the statement by governor Philip Lowe said. "Economic conditions in China have steadied, supported by growth in infrastructure and property construction, although medium-term risks to growth remain."

The statement also pointed to variation in employment across the country, with part-time jobs growing strongly, while employment growth overall has slowed, and said forward looking indicators point to an expansion in employment in the near term.
On the labour market, an area of particular focus given weak wage and employment growth and elevated levels of underemployment, the board said recent indicators “continue to be somewhat mixed”.

“The unemployment rate has declined this year, although some measures of labour underutilisation are little changed,” it said, acknowledging that “there continues to be considerable variation in employment outcomes across the country”.

"In Australia, the economy is continuing its transition following the mining investment boom," Dr Lowe said, adding that increases in resources exports are expected as projects are completed. National Accounts data are due out on Wednesday, and analysts are warning they may show GDP shrank 0.1%.