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RBA's economics puzzle solved by jobs not GDP

Matthew Cranston and Patrick Durkin
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A serious conflict is developing between economists about how to solve the Reserve Bank's economic "puzzle" of why GDP is softening when employment is strengthening, with some insisting that the latest jobs data is a better indicator of future economic strength than December quarter GDP figures.

The market is pricing in a rate cut by November and yet another of the big four banks - this time NAB - forecast on Friday two rate cuts for this year starting as soon as July, largely because of weak consumption and GDP figures.

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Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter.

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    Original URL: https://www.afr.com/policy/economy/rbas-economics-puzzle-solved-by-jobs-not-gdp-20190308-h1c53m