Real incomes have risen by an average of two-thirds in Australia in the last 17 years, while household net wealth has risen by over 200 per cent. Australia still has strong jobs growth and unemployment at close to a 30-year low, but inflation is a problem. Core price inflation rose by 3.4 per cent in calendar 2007, against the central bank's target rate of between two and three per cent. The Reserve Bank would be concerned that as inflation accelerates, economic expansion has reached above-trend levels without being bolstered significantly by the commodity boom viewed as responsible for the country's wealth.
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