Michael Blythe Market Quotations

Consumer caution was shaping up as the major domestic risk to the Australian economic outlook in 2006. Good labor market outcomes were always going to be the best antidote to this caution.

Whether or not this consumer caution becomes a persistent theme in 2006 will depend to a large extent on labor market trends.

Some of the risks coming through in the labor market in Australia are still very tight and, ultimately, you would expect that to push up wages and then flow through to inflation.