Strong economy still way off RBA's aim

The minutes of the Reserve Bank’s April 6 monthly board meeting are unlikely to throw up anything new, but it won’t stop economists scouring them for any shifting risks to the outlook.

That meeting left the cash rate, and the rates on the central bank’s toolkit of policies, unchanged at a record low 0.1 per cent.

RBA governor Philip Lowe reiterated at the time the cash rate would not be hiked until inflation was comfortably within the two to three per cent target band, an event unlikely to occur until 2024 at the earliest.

“Despite Australia’s stunning economic recovery, we are still a long way off meeting the conditions necessary for the RBA to increase the cash rate,” St George economist Matthew Bunny said.

While the unemployment rate did drop to 5.6 per cent in March figures released last week, it is still a long way off from the low fours the central bank is aiming for, and a level not seen since 2008.

Even so, in February the RBA did forecast the jobless rate being 6.5 per cent at the end of June.

The RBA minutes are released on Tuesday, as is the latest weekly ANZ-Roy Morgan consumer confidence survey.

Last week its measure of consumer confidence jumped 5.9 per cent to its highest level since September 2019, buoyed by the news of a two-way travel bubble between Australia and New Zealand being agreed to.

That quarantine-free travel started on Monday.

Confidence is a key pointer to future household spending.

Preliminary retail trade figures for March are due on Wednesday, which are expected to show spending grew by a solid 1.0 per cent in the month, rebounding from the 0.8 per cent decline in February.

This expected bounce in spending comes after the snap COVID-19 lockdowns in Victoria and Western Australia weighed on the February result.