Received

The jobs market is too strong and the unemployment rate too low for the Reserve Bank to stamp down inflation.

RBA deputy governor Michele Bullock says an unemployment rate of around 4.5 per cent is roughly the lowest possible level that's consistent with the RBA's two-to-three per cent inflation target.

The jobless rate has been stuck well below four per cent for months on end, coming in below expectations at 3.6 per cent in May.

The rapid economic recovery from the COVID-19 pandemic has pushed Australia "at or even perhaps above" estimates of full employment, which is basically when people are able to find a job without having to search for too long.

Ms Bullock said the level of employment was now almost eight per cent above its pre-pandemic level.

While the senior RBA official welcomed the widespread gains in employment, she warned the jobless rate would have to drift up to closer to 4.5 per cent to get the economy "closer to a sustainable balance point".

A tight labour market, characterised by greater demand than available supply, puts upwards pressure on wages and inflation. Conversely, spare capacity in the labour market tends to push wages and inflation down.

She said full employment had not taken a "back seat" to inflation targeting but it was important to take some heat out of the labour market or risk more job losses down the track.

"If high inflation were to become entrenched in people's expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment," she warned.

"A deep and long-lasting recession would be likely, which would mean a substantial rise in the unemployment rate."

She also said the RBA has been willing to tolerate a longer time frame to bring inflation back to target - around mid-2025 - than some of its international peers in the hopes of keeping more people in jobs in the process.

The RBA expects the unemployment rate to rise to 4.5 per cent by late 2024.

Her speech comes hot on the heels of minutes from the central bank's June interest rate decision, which indicate another "finely balanced" call between another hike or staying on hold.

The RBA ultimately landed on another 25 basis point increase to bring the cash rate to 4.1 per cent.

Keeping the cash rate unchanged was a live option but a pause in June would have been "reconsidered at subsequent meetings, with the benefit of additional data".

As indicated by the deputy governor, the board has become worried about inflation expectations that would keep it higher for longer.

Unit labour costs, an indicator of the average cost of labour per unit of output produced, have also been weighing on the RBA.

The minutes rehashed the central bank's concerns about sluggish productivity growth that could lead to high unit labour costs.

Board members were also mindful of the risk of widespread pay rises in line with inflation.

"Similarly, members observed that some firms were indexing their prices, either implicitly or directly, to past inflation," the board minutes said.

The rebounding housing market was also cause for concern as it would likely reduce drag on consumer spending.

Supporting the case for a pause was falling commodity prices and sinking international shipping costs.

There had been little change in medium-term inflation expectations in financial markets, which could help keep inflation expectations contained.

Additionally, the board noted that the RBA had a history of overestimating wage growth before the pandemic and that productivity could pick up by more than expected.

© AAP 2023

Renter confidence remains in tatters, with sentiment among tenants returning to record-low levels.

Rising rents likely fed into the decline in renter confidence as sampled by ANZ and Roy Morgan every week.

Confidence among the housing group fell back to its recent all-time low first reached in mid-May.

Tenants have been enduring surging rents as a shortfall in listings collides with the rebound in overseas migration and international students post-COVID.

For many renters, limited supply and high demand have delivered double-digit rental increases.

Confidence among mortgage holders recovered a little over the week.

But for those who have paid off their home loans, sentiment sunk to its lowest level since early April 2020.

The overall consumer confidence gauge edged 0.3 points lower to 72.4.

ANZ senior economist Adelaide Timbrell said this was among the four weakest results since the pandemic began.

"Notably, confidence about 'current financial conditions' fell to a new low, after declining 10.6 points in the past four weeks," she said.

Also on Tuesday, the Reserve Bank is expected to release the minutes from the most recent board meeting.

Australia's central bank opted to hike by 25 basis points at the June meeting, sending the cash rate above four per cent.

The RBA has lifted the official cash rate 12 times since May last year, choosing to hike at every meeting except April.

The board will next meet on July 4.

Two senior RBA officials will also make public appearances on Tuesday.

Deputy governor Michele Bullock is doing a speech on "achieving full employment" at an Ai Group event in Newcastle and assistant governor Chris Kent is speaking on a panel on the ISDA/AFMA Derivatives Forum in Sydney.

© AAP 2023

US and Canadian ships and planes are searching for a submarine that has gone missing off the coast of southeastern Canada while taking tourists to explore the wreckage of the Titanic.

The US Coast Guard said one pilot and four passengers were on board and the vessel had the capacity to be submerged for 96 hours but it was unclear whether it was still underwater or had surfaced and was unable to communicate.

British billionaire Hamish Harding is among the passengers, according to a social media post from a relative.

US and Canadian ships and planes have swarmed the area about 1450 kilometres east of Cape Cod, some dropping sonar buoys that can monitor to a depth of 3962 metres, US Coast Guard Rear Admiral John Mauger told reporters on Monday.

"It is a remote area and it is a challenge to conduct a search in that remote area," Mauger said.

"We are deploying all available assets to make sure that we can locate the craft and rescue the people on board," he said.

"Going into this evening we will continue to fly aircraft and move additional vessels."

Mauger said officials have also been reaching out to commercial vessels for help.

The private company that operates the submarine, OceanGate Expeditions, said in a statement on Monday it was "mobilising all options" to rescue those on board.

The US Coast Guard said earlier on Twitter a boat on the surface - the Polar Prince - lost contact with the submarine, called the Titan, about one hour and 45 minutes after it began diving toward the site of the Titanic's wreckage on Sunday morning.

"We are deeply thankful for the extensive assistance we have received from several government agencies and deep sea companies in our efforts to re-establish contact with the submersible," OceanGate said.

Harding's stepson wrote on Facebook that Harding had "gone missing on submarine" and asked for "thoughts and prayers".

The stepson subsequently removed the post, citing respect for the family's privacy.

Harding himself had posted on Facebook that he would be aboard the sub.

There have been no further posts from him.

The expedition headed out to sea on Friday, and the first dive was set for Sunday morning, according to Harding's post.

The expeditions, which cost $250,000 per person, start in St John's, Newfoundland, before heading out approximately 640km into the Atlantic to the wreckage site, according to OceanGate's website.

To visit the wreck, passengers climb inside Titan, the five-person submersible, which takes two hours to descend approximately 3800m to the Titanic.

Harding is a holder of three Guinness World Records: longest duration at full ocean depth by a crewed vessel, longest distance traversed at full ocean depth by a crewed vessel and fastest circumnavigation via both poles by aeroplane.

Two of these feats were achieved by Harding and ocean explorer Victor Vescovo when they dived to the lowest depth of the Mariana Trench - the deepest part of the ocean - in a two-person deep-submergence vehicle in March 2021.

The Titanic passenger ship famously sank in 1912 on its maiden voyage after striking an iceberg, killing more than 1500 people.

© RAW 2023