Currency capers: Reserve Bank governor Glenn Stevens.

Stop the scaremongering: The Reserve Bank and governor Glenn Stevens noted slow but steady growth in the economy across a number of sectors. Photo: Bloomberg

There's a clear message in the latest Reserve Bank board minutes: the media and politicians of all stripes should go have a cold shower as their scaremongering and ignorance is not doing the country any good.

Of course the gentle folk at our central bank don't put it as bluntly as that, but a large percentage of the minutes is taken up with negating the self-serving claims and inferences of both sides of politics, let alone the wilder headline writers.

Top of the domestic agenda for this month's meeting was the labour market and an immediate implied whack for the Federal Minister for Employment, Eric Abetz, and his claims of wages breakouts, rampant unions and such:

"Members began their discussion of the domestic economy with the labour market. They noted that wage growth remained subdued, in line with the weak conditions in the labour market and relatively low consumer and union inflation expectations. The wage price index rose by 0.7 per cent in the December quarter, to be 2.6 per cent higher over the year, the lowest year-ended outcome since the series began in the late 1990s. Wage growth in the public sector over 2013 was around its slowest pace since 2000, consistent with ongoing fiscal restraint. Business surveys indicated that wage growth in the March quarter was likely to remain subdued, which was consistent with liaison reports that firms were having little difficulty finding suitable labour."

But the very next paragraph contains a poke in the eye for opposition leader Bill Shorten and the other Labor types who have spent so much time dancing on the headline job losses, feigning outrage and concern and somehow trying to blame the new government:

"The unemployment rate had increased to 6 per cent in January, continuing its gradual increase of the past 18 months, while the participation rate had declined significantly since the middle of the previous year, largely because of a decrease in male participation. The level of employment was little changed over the past year, although total hours worked had increased. Members noted the recent high-profile announcements of future job losses against the backdrop of the 400,000 to 450,000 people who leave employment each month and the similar number who take up employment. They discussed the potential for the extensive coverage of these job losses adversely to affect consumer confidence. At the same time, there was evidence that forward-looking indicators of labour demand had stabilised, following earlier declines to low levels."

And, er, ahem, yes, there might well be a criticism there of the media, from the top to the bottom, losing perspective about redundancies and beating up the fear factor – always the best method of grabbing eyeballs.

A little later in the minutes, the RBA reminds readers of the simple reality of the employment outlook:

"While the labour market was expected to remain subdued for a while and wage growth had declined, the Board observed that this was consistent with conditions in the labour market usually lagging changes in economic activity."

After correcting employment misconceptions, the RBA board moves on to hosing down various other fears. The housing market? The bank is certainly watching, with a keen eye for signs of excess, but so far it's doing what it should:

"Ongoing strength in the established housing market and low lending rates were expected to support new dwelling activity. Dwelling investment was expected to record a slight decline in the December quarter, but a strong increase in approvals for residential buildings over recent months – both for higher-density and detached dwellings – pointed to a substantial increase in dwelling investment in subsequent quarters. Loan approvals and first home buyer grants for new dwellings had also increased of late. Members noted that construction firms were optimistic about the outlook and had reported a pick-up in enquiries from prospective new home buyers."

When it came to the barbeque-stopper of rising housing prices, a warning of "close observation" was warranted, but there was no need to reach for the monetary cudgel yet and macroprudential tools are on the table:

"Members noted that rising housing prices and household borrowing were expected results from the monetary easing that had taken place. While these factors were helping to support residential building activity, they also had the potential to encourage speculative activity in the housing market. Lending to housing investors had been increasing for some time in New South Wales, and over the past six months it had also picked up in some other states. While such a pick-up would be unhelpful if it was a result of lenders materially relaxing their lending standards, current evidence indicated that there was little sign of this occurring. Members noted that the recent momentum in households' risk appetite and borrowing behaviour warranted close observation, but agreed that present conditions in the household sector did not pose a near-term risk to the financial system. Members discussed the experience in other countries where macroprudential tools had been utilised to slow demand for established housing and their possible application in Australia."

As for the China bears forever preaching imminent doom, the RBA again offers perspective, looking to the longer-term trends over a couple of wobbles in monthly data:

"For China, the recent data were more difficult to interpret at this time of the year owing to the Chinese New Year holiday. The limited data available suggested that growth may have moderated a little in early 2014. In particular, the manufacturing PMIs declined in January, suggesting that conditions in the manufacturing sector had softened somewhat. Even so, merchandise imports rose strongly in January, including imports from Australia. The Board was briefed about longer-run trends, which suggested that, while the working-age population was close to peaking, urbanisation was expected to continue in China for some time. Combined with likely increases in the size and quality of housing, this could underpin high levels of new urban residential construction over coming years."

What's more, the RBA observed the Chinese liquidity conditions had eased throughout February, "the 7-day interbank repo rate fell to its lowest level since May 2013, despite the People's Bank of China withdrawing liquidity". Yes, it looks like Beijing is on the case.

The minutes give a tick for household spending holding up, making the best of the quiet word it has with industry leaders:

"Growth in household spending looked to have picked up slightly in the December quarter, although the pace of growth was expected to remain a little below average for a time. Liaison suggested that the stronger retail sales seen in the latter months of last year had continued into the early part of this year, though sales growth may have eased somewhat."

As for the business sector, confidence had picked up, there were early signs of small pickup in non-mining capital investment and, while demand for credit remained soft, the sector was no longer deleveraging: "Indicators of distress in the business sector continued to decline, particularly the amount of non-performing loans related to commercial property."

All in all, no wonder the message is so clear now that rates are likely to stay on hold, that, if the economy unfolds in line with the RBA's best guess, the next movement is likely to be up. But that the RBA doesn't go that far, forecasting only "a period of stability". I wouldn't want to be accused of beating it up.

Michael Pascoe is a BusinessDay contributing editor.