Turning to the household sector, as I mentioned earlier, labor market conditions have continued to tighten steadily amid economic expansion (Chart 5). The active job openings-to-applicants ratio for December 2017 improved to 1.59, a level seen for the first time in about 44 years, since 1974, and the unemployment rate has declined to a level seen for the first time in about 24 years.
Conventional monetary policy – or changes in main policy rates The direct effects of rate changes on income are relatively straightforward to understand. In the case of an increase in interest rates, the interest paid, for instance on deposits, will rise, increasing the financial income earned by households with savings, who are typically wealthier households, but also many retirees.