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Rush of economic data before RBA meets

Signs of a rapid recovery from last year’s COVID-19 recession are not expected to alter the Reserve Bank’s view on the interest rate outlook when its board meets for the first time this year on Tuesday.

The central bank will get plenty of opportunity to express its current thinking this week, with its governor Philip Lowe addressing the National Press Club on Wednesday and then being quizzed by federal politicians on Friday.

The Reserve Bank will also release its quarterly statement on monetary policy on Friday, which will contain its latest economic forecasts.

Treasurer Josh Frydenberg is not about to make new predictions on the unemployment rate outlook, even though he says the labour market has outperformed expectations.

This has seen the jobless rate unexpectedly fall to 6.6 per cent, when Treasury was predicting a rate of 7.5 per cent in the March quarter.

Asked on ABC’s Insiders program whether unemployment would still get up to 7.5 per cent, Mr Frydenberg replied: “Let’s wait and see”.

There will be a wide spread of economic figures for the Reserve Bank and Treasury to digest this week, kicking of with manufacturing, house prices and job advertising on Monday.

Job advertising has been particularly upbeat in recent months, suggesting the rapid recovery in the labour market, which has seen the restoration of 90 per cent of the jobs lost during the recession, is set to continue.

House prices also managed a three per cent rise in 2020, despite Australia’s first recession in nearly 30 years.

Further gains are seen likely this year as the economic recovery continues and interest rates remain low, although COVID-19 scares in NSW and Queensland either side of Christmas may have dented housing interest and prices at the start of the year.

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