Ex-RBA Chief Lowe Urges Policy Pause to Assess High Labor Costs

Former Australian central bank Governor Philip Lowe said a clouded outlook for the nation’s high unit labor costs suggests the best course for the Reserve Bank is to “sit still.”

Speaking to Bloomberg Television’s “The China Show” on Thursday, Lowe pointed out that the average cost of labor per unit of output produced has been running at close to 5% for a number of years and that made it tough to achieve 2.5% inflation, the midpoint of the RBA’s 2-3% target.