Academics believe the case for an interest rate rise by the Reserve Bank is growing but don't expect it to happen just yet.
The central bank board meets on Tuesday, their first gathering since the national accounts showed solid economic growth had been recorded in the June quarter and the latest jobs figures saw another sharp jump in the number of people in employment.
Timo Henckel, a lecturer at the Australian National University's Research School of Economics, says while Australia's economic outlook is more positive, inflation and wages growth remain subdued.
"Eventually, the growing tightness of the labour market ought to spill over into higher wages," Dr Henckel said in a statement on Monday.
The global economic outlook also continues to brighten with share markets making steady gains and the US Federal Reserve's rhetoric clearly pointing to further increases in the fed funds rate.
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"So far financial markets do not seem concerned about the sabre rattling between the US and North Korea, but that may change rapidly if the prospect of war becomes more likely," Dr Henckel said.
Dr Henckel chairs the ANU's so-called "RBA shadow board", made up of academics, economists and former RBA board members.
"The case for increasing the cash rate in the future is building," he said.
"However, for this month the RBA shadow board continues to advocate a hold-and-wait policy."
A 60 per cent probability was put on the cash rate remaining at a record low 1.5 per cent on Tuesday but a 73 per cent chance was given on a hike in the next six months.
Economists will be looking for improved outcomes for retail spending and international trade when August figures for both are released on Thursday.
Household spending and exports were two key factors in the strong recovery in economic growth during the June quarter, although disappointing outcomes were recorded for both in July.
Economists expect retail trade to have risen by 0.3 per cent in August after the flat result in the previous month and a $900 million monthly trade surplus having shrunk to a $460 million surplus in July.
