Money RBA's Ellis tips wages to grow, eventually

12:31  13 february  2018
12:31  13 february  2018 Source:   MSN

Weak wages risk to budget outlook: IMF

  Weak wages risk to budget outlook: IMF The International Monetary Fund is anticipating a gradual pick-up in Australian economic growth with a return to full employment by 2020.Weak wages growth is threatening the Turnbull government's forecast for a budget surplus in mid-2021, the International Monetary Fund warns.

Employers have cut costs in the face of strong competition but early signs of labour shortages and an inability to further trim margins mean that they will eventually have to raise prices and wages , RBA assistant governor Luci Ellis said in a speech on Tuesday.

RBA ' s Ellis tips wages to grow , eventually . Cochlear lifts dividend despite profit dip. Boral lifts first-half profit by 13%.

Dr Luci Ellis.© AAP Image Dr Luci Ellis. The Reserve Bank expects wage growth to pick up eventually even though companies are currently reluctant to raise salaries for fear of becoming uncompetitive.

Employers have cut costs in the face of strong competition but early signs of labour shortages and an inability to further trim margins mean that they will eventually have to raise prices and wages, RBA assistant governor Luci Ellis said in a speech on Tuesday.

Dr Ellis said current enterprise agreements would likely create a lag between labour shortages and wage rises to attract skilled staff, but that firms will eventually have to move on remuneration.

Kings beat Bullets, move out of NBL cellar

  Kings beat Bullets, move out of NBL cellar Sydney have beaten the Bullets 90-73 in Brisbane, with the Kings finally moving off the foot of the NBL ladder.Perry Ellis hit 22 points and skipper Kevin Lisch 18, including five three-pointers, as the Kings ran out 90-73 winners on Thursday night at the Brisbane Entertainment Centre.

RBA ' s Ellis tips wages to grow , eventually . Cochlear lifts dividend despite profit dip. Boral lifts first-half profit by 13%.

Profits from USG Boral are expected to grow at a mid-single digit rate in FY2018, while Boral Australia is expected to deliver high single-digit earnings growth in the full year. RBA ' s Ellis tips wages to grow , eventually .

"Despite firms' reluctance to raise prices, margins cannot be squeezed forever," Dr Ellis told a conference in Sydney.

"Higher costs will, therefore, boost price inflation over time."

But heightened competition in retail - which has led to the demise of stores including Dick Smith, led to profit warnings from the likes of Myer, and created margin pressures at retailers including JB Hi-Fi - means there is still firm resistance to lifting wages.

"Foreign retailers have entered the local market in recent years and continue to do so," Dr Ellis said.

"This has also induced the existing players to reduce their costs to stay competitive, for example by improving inventory management."

Here's a simple explanation for why markets are freaking out .
The simplest explanation for the sell-off in US stocks on Friday is that investors are worried the inflation genie might be out of the bottle. The searing run of US job creation finally has America's labour market at a point where wages are starting to rise more rapidly than anticipated. After the release of the US monthly jobs data on Friday, which showed wages growth rising at 2.9%, Deutsche Bank's chief international economist Torsten Slok released a presentation on Friday which was ominously titled: "US employment outlook: Labour market beginning to overheat.

—   Share news in the SOC. Networks
This is interesting!