Australia's latest jobs report is looking good

Unemployment growth in Australia is lumbering along, unchanged, at a near six-year low of 5.3%. But the light at the end of the tunnel, lurking in the latest, monolithic pile of data, is a drop in the under-employment rate, which refers to people who work casual or part-time but want full-time work. Under-employment is down 0.3% to 8.1%, and this points to a labour market slowly-but-surely absorbing excess supply and growing demand — a prerequisite for meaningful wage growth.

So why does this matter? Wage growth translates to more money in the economy, which fires-up the inflation genie, and prompts the RBA to raise rates to put that pesky genie back in its bottle. Wage growth. Inflation. Rates. The holy trinity of monetary policy that so strongly determines all things property.

But despite the speck of light in the distance that is wages growth, most economists agree there’s still a way to go before Australian workers see any material gain of the cold, hard variety in their pockets. And even longer before the RBA starts to migrate rates north, which, depending on how you read the tea leaves, could be as early as next year or as late as 2020.