RBA meeting minutes: growth had moderated in the June quarter, as expected

Members commenced their discussion of the Australian economy by noting that growth had moderated in the June quarter, as expected, following the very strong growth recorded in the March quarter. GDP growth over the year was higher than had been forecast a year earlier and above estimates of potential growth. Overall, growth in output in the September quarter was expected to have continued at a moderate pace similar to that seen in the June quarter.

Mining activity had grown over the year to the June quarter by more than had been expected a year earlier due to a larger-than-expected increase in resource export volumes, which looked to have increased further in July.

Household consumption growth had moderated in the June quarter. This was driven by a decline in the consumption of goods, consistent with low growth in retail sales volumes, while growth in the consumption of services had remained around average.

Indicators of labour market conditions had been mixed. The unemployment rate had declined to 5.6 per cent in August and had fallen by around ½ percentage point over the past year. However, the underemployment rate, which captures workers who would like to work more hours, had increased over the past year.

Growth in China appeared to have stabilised in recent months, supported by fiscal stimulus and accommodative financial conditions. Growth in private investment had shown some signs of stabilising, after declining since late 2011, and consumer spending appeared to be holding up, consistent with stable labour market conditions.