This came despite no apparent change to the Bank's outlook for household consumption — the largest component of the domestic economy — which it maintained as uncertain given that income growth remains low, debt levels high and "some asset prices have declined", though specific commentary regarding property price declines was unchanged from last month.
On the labour market, the firming in the outlook for above-trend growth is now expected to drive the unemployment rate down to around 4.75% in 2020, which is a more upbeat assessment from last month where it had only expected a gradual decline in the unemployment rate to around 5% by 2020. However, stronger growth in wages is "still expected to be a gradual progress".
Regarding inflation, today's statement highlighted that, as the RBA had expected, Q3's inflation data had softened following once-off impacts to prices — mainly in childcare — following changes in government policy. With these impacts now in the past, the Bank expects inflation will rise from its current pace of around 1.9% to 2.25% in 2019, which is in line with previous forecasts, but then anticipates a stronger trajectory than previously estimated in 2020.
Recent financial market volatility was noted by the Bank referencing declines in global equity markets and higher government bond yields. However, the Bank remains sanguine on the outlook for the real global economy with above-trend growth, low unemployment rates, and expansionary financial conditions.