VIEW: ANZ Maintain RBA View In Wake Of Labour Market Data

ANZ maintain a “positive outlook for the labour market in 2023 and expect unemployment will remain in the mid-3s next year. This will cushion the economic slowdown and mean inflation is stickier, supporting our view that the RBA will need to take the cash rate to 3.85% by May 2023.”

• “Increased net migration is a tailwind for employment growth as it improves the matching of workers to vacant jobs and lifts demand growth, all else equal. Employment was revised upward materially over the previous six months, on the back of stronger migration and population growth than previously assumed.”
• “The volume of unfilled labour demand is still substantial, with the Q3 labour account showing the proportion of vacant jobs rose to a record high of 3.2%. This will continue to put upward pressure on wage growth. The employment index in NAB’s November business survey remained well above average, indicating that hiring activity remains strong.”