Thank goodness Australia’s economic policymakers aren’t as febrile as some commentators and screen jockeys or the markets.

Until recently, the general sentiment about the economy was about lacklustre growth, the damaging effects of wage stagnation and a lack of enthusiastic investment from business. A few data points later, however, and the monetary hawks were out in force talking about interest rate rises — and not one or two either. For some foreign analysts, the Reserve Bank should be lifting rates, or at least talking about lifting rates, just because other central banks were doing so. Which is the same kind of logic employed by those foreign analysts who get slavishly reported by Fairfax insisting that Australia has a housing bubble that’s about to burst because Sydney houses are more expensive than overseas.

But annoyingly, yesterday the RBA sat on its hands when it came to interest rates, as most credible economists thought it would, and didn’t offer a hawkish word in the post-meeting statement from governor Philip Lowe.

It’s true that job growth in Australia is looking up. Monday’s ANZ job ads survey for June showed the strongest growth for five years; seasonally adjusted job ads rose 2.7% in June from May; in trend terms, they were up 1.0%. Trend growth rate over the six months to June was 0.6% a month, double the 0.3% rate for the first six months of 2016. There were 175,091 job vacancies at the end of June; on a trend basis there, were 172,926. Both were the highest since 2010-11. That backs up the Australian Bureau of Statistics’ own vacancies data, which showed growth for the year to May of 9.2%.

But the RBA remains concerned about wages growth (despite giving its own staff a paltry pay deal). “Indicators of the labour market remain mixed,” Lowe said in his statement. “Employment growth has been stronger over recent months. The various forward-looking indicators point to continued growth in employment over the period ahead.” However, he noted “at the same time, consumption growth remains subdued, reflecting slow growth in real wages and high levels of household debt.” That wasn’t the only mention of wage stagnation. He also said “wage growth remains low, however, and this is likely to continue for a while yet.”. 

It’s interesting, isn’t it, how wage stagnation doesn’t appear to be an important issue for investment bank analysts, politicians and senior business figures? One can only assume it’s because they themselves are sufficiently well remunerated that the challenge most households face of making ends meet — exacerbated when wages aren’t growing — is one they never have to deal with.

Retail has also witnessed some sentiment volatility. One minute, consumers are shy and Amazon is coming to eat everyone’s lunch, the next, everything’s fine. One minute, there’s a string of profit and sales downgrades from the likes of OrotonGroup, Super Retail, Automotive Holdings Group, The Reject Shop, RGC, the next, retail sales are up.

Yesterday, the ABS reported that retail sales rose 0.6% in May (seasonally adjusted, three times the market forecast for a 0.2% rise), after an unrevised 1% rise in April. Suddenly the bulls return and up go retailing shares. Speciality Fashion shares leapt 8.8%, Myer shares jumped 3.6%, Automotive Holdings shares were up 3%, fellow car dealer AP Eagers, 2.3% (and 14% and 10% in the past fortnight respectively). The Reject Shop shares were also up nearly 3%, Super Cheap shares rose 4% and JB Hi-Fi and Harvey Norman shares (both have been top of many lists as Amazon’s chief victims) saw 5% price surges. Woolworths’ shares ended up 1.5%, Wesfarmers shares gained 1.8% and even the struggling OrotonGroup gained a 1.4% rise.

Where is the growth in retail sales coming from if wages are stagnant? From debt and consumers further reducing their savings. The Reserve Bank will be carefully watching both. Spending can only go up by so much while business and the government remain hostile to wages growth.