RBA Governor Says Unemployment May Need to Rise to 5% to Ease Inflation

Reserve Bank of Australia (RBA) governor Michele Bullock indicated that the country's unemployment rate may need to rise to 5% to ease pressure on inflation.

In a speech at a Committee for Economic Development of Australia (CEDA) event, Bullock noted that the labor market is still tight and contributing to high inflation. When asked what level of unemployment would be acceptable, she replied that 'between 4.5 and five will probably take enough heat out of the labour market that it'll ease pressure on inflation.'

Bullock emphasized that the RBA's focus is not on a specific target for unemployment but rather on finding a balance between joblessness and supply-side pressures in the economy.