The RBA could increase rates next month, as employment rises and some economists warn the central bank has not done enough to cool the economy.
The Reserve Bank of Australia could be forced to increase interest rates as soon as May after surprisingly strong employment gains led some economists to warn that the central bank has not done enough to cool the economy.
The employment gains in March were driven by an increase of 72,200 full-time workers, which was only partly offset by a fall of 19,200 in part-time employment. “This affirms our expectation that the March quarter CPI print will be a strong one, and we expect to see the RBA raising rates again in May,” he said.Overall, the data shows the labour market remains extremely tight, as the unemployment rate holds steady at levels not reached since the 1970s.
ABS head of labour statistics Lauren Ford said the total hours worked had increased by 5.5 per cent over the past year, outstripping annual employment growth of 3.3 per cent. ANZ senior economist Catherine Birch said the March inflation figures were likely to show that underlying price pressures remained sticky, with trimmed mean inflation tipped to come in at 1.5 per cent in the quarter, to be 6.8 per cent over the year.
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