* Labour market slack weighing on wage growth - RBA's Ellis
* Ellis says comfortable with speed at which inflation is rising
* Will not speculate on domestic monetary policy
* House price still rising at a "rapid clip" (Updates with quotes from assistant governor)
By Swati Pandey
SYDNEY, Sept 20 (Reuters) - Australia's labour market still has plenty of spare capacity, which is likely to cap wage growth and restrain inflation for some time yet, a senior central bank official said on Wednesday.
Data out this month showed jobs blew past expectations to surge the most in two years in August, with more full-time work created than part-time. the unemployment rate was static at 5.6 percent as more people looked for work, an outcome that is weighing on wages growth and, in turn, inflation.
"We need to be focused on the global economy but if we had just two pieces of information, the other one would be how much slack there is in the Australian economy," Reserve Bank of Australia (RBA) head of economics Luci Ellis said at a business lunch in Sydney.
"Our assessment is there is still a fair bit of slack in the labour market."
She was responding to questions after a speech titled 'the current global expansion'. RBA has left interest rates at a record low 1.50 percent after last easing in August 2016 as it balances tepid inflation and wages growth against rising household debt.
Ellis declined to comment on questions about the outlook for monetary policy in Australia.
The RBA has sounded more optimistic about the economy recently as the labour market has made a remarkable turnaround since the beginning of this year. said the unemployment rate needs to edge down to around 5 percent for the economy to run full throttle and generate wage pressures.
But the RBA remains comfortable with the outlook for inflation and the time it might take to get back to target, Ellis added.
The RBA has forecast underlying inflation, currently around 1.8 percent, to reach the floor of its 2 to 3 percent target band by next year.
One risk to that forecast is the record-high household debt in Australia, which is a "potential exacerbating factor" in the event of an economic shock, Ellis said in her speech.
Indebtedness has increased as more Australians speculate in the property market, particularly in Sydney and Melbourne where home prices have broadly doubled since 2008.
Ellis noted that house price growth is showing signs of cooling, particularly in Sydney and Melbourne, although it was "still rising at a reasonably rapid clip."
According to property consultant CoreLogic, home prices in Sydney are rising at an annual 13 percent in Sydney and 12.7 percent in Melbourne.