Jobs growth blip unlikely to halt interest rate hikes
Growth in Australia’s jobs market weakened in December in what should have been a dent in the strategy to lift interest rates again next month.
Queensland's jobless rate rose slightly in December: ABC
But economists think it may have been a one-off and the job market would continue to be “very tight”. While that is a good thing for workers it means more money in the economy and more spending which feeds into inflation.
Employment actually fell by 15,000, but it grew at an average of 40,000 a month between August and November. The number of unemployed increased by 6000.
But ANZ speculated that, with the data showing 444,200 job vacancies in November combined with Thursday’s unemployment figures, it was hard to see a sharp rise in unemployment anytime soon.
“Next week’s consumer price index data will be more important, but today’s data will not convince the RBA to pause so soon. A few months of weakening data would be needed for it to be considered a turning point ,” ANZ said.
According to the Australian Bureau of Statistics, unemployment in Australia was steady at 3.5 per cent. In Queensland it jumped 0.5 per cent to 3.8 per cent. The ACT has the lowest rate at 2.8 per cent followed by NSW at 3.1 per cent.
“We still expect the cash rate to reach 3.85 per cent in May.”
The CBA has tipped one more rate increase before the Reserve Bank pauses. Its forecast (3.25 to 3.5 per cent) for the peak cash rate is much than ANZ.
IFM Investors economist Alex Joiner said the jobs data was weaker than expected and an “early sign that labour demand may ease through 2023 while labour supply momentum continues to build”.
