{"id":786801,"date":"2026-07-08T11:11:15","date_gmt":"2026-07-08T11:11:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/786801\/"},"modified":"2026-07-08T11:11:15","modified_gmt":"2026-07-08T11:11:15","slug":"rba-assistant-governor-sarah-hunter-warns-high-unemployment-needed-to-lower-inflation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/786801\/","title":{"rendered":"RBA assistant governor Sarah Hunter warns high unemployment needed to lower inflation"},"content":{"rendered":"

Reserve Bank of Australia<\/a> (RBA) assistant governor and chief economist Sarah Hunter warned that high unemployment may be needed to lower inflation and expectations. <\/p>\n

In a speech to economists in Canberra <\/a>on Wednesday, she said the bank\u2019s focus on reining in inflation to the 2-3 per cent target helps keep people\u2019s expectations realistic and minimise the risk of persistent inflation.<\/p>\n

\"\"<\/p>\n

RBA Assistant Governor Sarah Hunter gave a speech in Canberra on Wednesday.\u00a0Alex Ellinghausen<\/p>\n

\u201cIf people expect the RBA to do what is necessary to keep inflation contained, inflation expectations are less likely to rise and so actual prices to change,\u201d she said. <\/p>\n

But if people try to predict the future based on past data, Hunter said, then their expectations may increase and it could be harder to bring down inflation. <\/p>\n

\u201c…We may need some period of low inflation and higher unemployment to bring expectations back down if they start drifting up,\u201d she said.<\/p>\n

Australia\u2019<\/a>s unemployment fell to 4.4 per cent in May, down from 4.5 per cent the previous month. <\/p>\n

April\u2019s figure was the highest unemployment rate since late 2021. <\/p>\n

Australia\u2019s unemployment rate remained strong in comparison to the rest of the world, with it sitting below the OECD average of 4.9 per cent. <\/p>\n

The RBA held the cash rate steady at 4.35 per cent during its latest meeting in June, following three consecutive hikes, as it waits and sees whether inflation will ease. <\/p>\n

Inflation unexpectedly slowed to 4 per cent<\/a> in the 12 months to May, which was the lowest level in three months. <\/p>\n

However, the trimmed mean \u2013 the RBA\u2019s preferred measure of underlying inflation \u2013 rose by 0.2 per cent to 3.6 per cent.<\/p>\n

Economists warned that there could be another rate hike as underlying inflation heads in the wrong direction. <\/p>\n

An OECD report published on Tuesday also found that there are signs of labour market weakening through slow employment growth and one of the steepest declines in real hourly wages (about 5 per cent). <\/p>\n

Economists and major banks have also forecast unemployment to approach 5 per cent over the coming year.<\/p>\n

Hunter said the RBA would continue to work to bring inflation to target and maintain full employment. <\/p>\n

\u201cThe board will continue to act as needed to ensure inflation returns to target and the labour market to sustainable full employment,\u201d she said. <\/p>\n","protected":false},"excerpt":{"rendered":"Reserve Bank of Australia (RBA) assistant governor and chief economist Sarah Hunter warned that high unemployment may be…\n","protected":false},"author":2,"featured_media":786802,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-786801","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/786801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=786801"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/786801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/786802"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=786801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=786801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=786801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}