Members commenced their discussion of international economic developments by observing that inflation abroad had remained high. Inflation outcomes for the major advanced economies had continued mostly to surprise on the upside – noticeably for the euro area, where higher prices for food and energy had boosted headline inflation. Core inflation had remained high in both the United States and the euro area, with services prices increasing strongly in these economies. Domestic demand had held up in most advanced economies in preceding quarters, reflecting relatively high levels of retail spending and a further transition in spending from goods to services following the pandemic. Nonetheless, the outlook for output growth had deteriorated for most countries, driven by the effects of inflation and higher interest rates on household budgets. In China, economic activity had been adversely affected by further lockdowns in pursuit of the authorities’ approach to managing COVID-19. Members noted that gas prices in the euro area had declined as storage levels reached capacity and mild weather in the northern hemisphere autumn helped to reduce demand relative to previous years; prices were, however, still above levels prevailing before the pandemic. A similar pattern of price decline had occurred in the market for thermal coal, though the price was still several times pre-pandemic levels. Prices of industrial-related commodities, including base metals and iron ore, had fallen to levels seen at the beginning of 2022. Labour markets in most advanced economies had remained very tight but had not tightened any further over the preceding month. There were tentative signs of an inflection point in some countries, with falls in employment being recorded recently. By contrast, US employment had continued to grow and unemployment was still very low, although survey data suggested that jobs had become easier to fill in recent months. tweet at 7:30pm: RBA: MEDIUM TERM INFLATION EXPECTATIONS, WAGES CONSISTENT WITH INFLATION RETURNING TO 2-3% TARGET #News #Markets #RBA #INFLATION #capitalhungry tweet at 7:34pm: RBA Minutes: Board Doesn’t Rule Out Return To 50Bps, Or Pause; No Pre-Set Path -Considered 50Bps Hike, Saw Stronger Case For 25Bps In November tweet at 7:31pm: THE RBA IS STEADFAST IN ITS DETERMINATION TO RETURN INFLATION TO TARGET AND TO DO WHAT IS NECESSARY.
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