The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Wednesday, February 23, 2011

Glenn Stevens on wages

With wage growth rising to an annualised pace over the last six months (or two quarters) of more than 4.0% (given today's data), it is useful to reflect on what the RBA Governor said on this subject to parliamentary testimony only a couple of weeks ago:

"In the [Statement on Monetary Policy] chart there the private numbers at the peak before they went down [during the GFC] were at four or 4½ as well...Three and a half per se across the economy on average in the private sector is not inflation breakout territory [NB: today the y/y wages number rose from 3.5% to 3.9%, with the average rate for the last six months being 4%]. So if it stays there I do not think we have got a problem with overall price pressures. We have got five per cent unemployment as of the January figures that came out yesterday. If our forecasts are right, that will edge down over the next couple of years and we would expect to see overall private wage growth go up some more from where it has been."