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MNI BRIEF: Aussie Sept Jobs Data Stalls; RBA On Track for 25bp

MNI (Perth)

The Reserve Bank of Australia will have been encouraged by September labour force data showing the red-hot jobs market may be losing some steam after downshifting to a smaller 25bp hike earlier this month. The unemployment rate was steady at 3.5% in September, still near the lowest level since the mid-1970s, according to data from the Australian Bureau of Statistics.

However, the addition of 900 jobs fell short of market expectations for an additional 25,000 jobs to be added. Hours worked fell and the underutilisation rate rose modestly. The participation rate remained steady at 66.6%.

A prospective cooling in the jobs market will please the RBA, which has been concerned that elevated inflation would feed into wages. The NAB Quarterly Business Survey released on Thursday showed expected annual wage growth rose to 2.1% in Q3 from 2% in Q2. However, firms reported ongoing labour constraints. The Seek Advertised Salaries Index released on Thursday showed 0.3% m/m growth and 3.7% y/y growth. (See AUSTRALIA DATA : Advertised Salaries Point To Contained Wage-Setting Psychology)

The RBA is expected to raise rates by 25bp to 2.85% at its November 1 meeting as its remains focused on reining in inflation. (See MNI STATE OF PLAY: RBA Taps Brakes, Sees Slower Pace of Hikes). Further inflation insights will come from the October 26 release of the September quarter CPI. Market expectations are for headline CPI to accelerate to 7% from 6.1% in the June quarter. (See MNI INSIGHT: UPSIDE RISKS To Australian Inflation But Will It Be Enough To Shift RBA Expectations). The Australian dollar weakened to a low of 0.6229 after the smaller-than-expected increase in new jobs. (See AUD: Small Correction Lower On Weaker-Than-Expected Employment Data)

Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
Robert covers RBA and RBNZ policy and the economy for MNI in Australia.

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