Job figures to set scene for possible interest rate cut
Australia’s central bank is preparing to release the first key data to decide whether further interest rate cuts are in store.
Labor force figures for September will be released by the Australian Bureau of Statistics on Thursday and economists predict the unemployment rate will remain stable.
Although employment decreased by 5,000 people during the month, the unemployment rate remained at 4.2 percent in August.
CommSec chief economist Ryan Felsman said a stable unemployment outcome was on the horizon, but a jump could change forecasts for a rate cut in early November when the Federal Reserve next meets.
“We expect employment to rise to 30,000 and the unemployment rate to remain stable at 4.2 percent, while the participation rate will increase slightly to 66.9 percent,” he said.
“A significant upturn in the labor market remains the key near-term risk to further easing.”
In the minutes of the September meeting, where the Central Bank decided to keep the official cash interest rate at 3.6 percent, it was stated that labor force figures were effective in this decision.
The bank’s board said labor market conditions remained tight despite uncertainty in forecasts.
“While the underemployment rate gradually decreased, other measures of labor underutilization remained generally stable,” the minutes said.
“Business research and liaison have shown that workforce availability is changing.
“Although some slackening in employment growth was anticipated in August due to the slowdown in population growth, the employment/population ratio and participation rate also decreased, but remained close to historical high levels.”
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