Latest data reported by the ABS dims chances of a near-term RBA interest rate cut
Australia’s unemployment rate ticked higher last month even as employers added about three times the number of jobs as expected. The job gains will likely discourage the Reserve Bank from cutting its key interest rate in the near term.
The jobless rate in July rose to 4.2%, the Australian Bureau of Statistics reported on Thursday. Economists had expected the rate to remain in line with theThe economy added 58,200 jobs last month. Economists had tipped employers would have added 20,000 positions. The labour market figures will be closely watched by the central bank as it considers whether inflation can remain on a downward track towards its 2%-3% goal while retaining as many job gains as possible.
The RBA expects the jobless rate to rise to 4.3% by December, a level that it would consider to be close to full employment. Prior to the release of today’s labour market figures, investors were rating the chance of an RBA rate cut of 25 basis points to 4.1% when its board next meets on 23-24 September as a 50-50 chance. Markets were also fully pricing in the odds of such a cut by the bank’s final meeting of the year in December, according to the ASX rates tracker.
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