The jobs data showed an economy that was still strong, but with inflation pressures remaining in check.

A stronger oil price is also adding to inflation pressures.

It also noted that "higher energy prices and other costs have the potential to add to inflation pressures."

So far there is little hard evidence that inflation pressures are taking root.

The larger the inflation pressure, the smaller the contact patch.

"The cumulative rise in energy and other costs have the potential to add to inflation pressures," the central bank said.

"There are signs of moderation, but inflation pressure is still in the system."

There is no reason, despite increasing inflation pressures elsewhere in the economy, for that to change this year.

"Clearly everyone is focused on labor market conditions, which could raise inflation pressures," he added.

Higher energy and other costs have the potential to add to inflation pressures.