National accounts data published this week showed that the Australian economy slowed to a grind last quarter, while private consumption fell outright. However, we suspect that the RBA will take that news in its stride. For one thing, the drop in household spending is likely to prove short-lived, with timely data pointing to a rebound in Q3. For another, unit labour cost growth barely moderated at all last quarter and is still far too high to be consistent with the Bank's 1-3% target. The upshot is that the RBA is unlikely to cut rates before Q2 2025, which is later than most are predicting.
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