Employment Holds Steady Amid Rate Speculation

1

With approximately 16,000 Australians entering employment last month, industry experts have suggested that this data will likely encourage the Reserve Bank of Australia (RBA) to delay any reductions in interest rates. Notably, economists from HSBC and financial firm VanEck have asserted that the RBA has fewer reasons to hasten their rate easing timeline.

Cameron McCormack, a portfolio manager at VanEck, interpreted the figures as indicative of a "robust jobs market." He warned, "The strength in the labour market continues to exert upward pressure on already elevated services inflation," complicating efforts to align inflation with the RBA's target range of 2 to 3%.

Meanwhile, My Bui from AMP articulated that the month's job growth was lackluster by recent standards, with Bjorn Jarvis of the ABS noting, "This was lower than each of the previous six months, when employment rose by an average of 0.3% per month."

Treasurer Jim Chalmers emphasized that while job creation remains robust and inflation declines, signs of deceleration are evident. "Our labour market has remained resilient to date," Chalmers remarked, "but it is softening around the edges with more modest employment growth last month."

Amid global economic uncertainty, rising costs, and increasing interest rates, Chalmers reassured Australians that the government's focus is on "easing the cost of living, getting more people into work, and helping Australians earn more and keep more of what they earn."

These remarks surface against a backdrop of impressive job creation up to September, with around 430,000 roles reported as being filled this past year—a fact that has drawn the attention of the RBA. Governor Michele Bullock has recognized the paradox of a vigorous labour market paired with high service-sector inflation.

Furthermore, a press release from The Nightly disclosed that while the RBA cautioned against a hike, it maintained assurance that Australians would not be "tossed out of their jobs" as market adjustments take place naturally over time.

This employment update coincides with news of Australian wage growth at 3.5% year-over-year up to September—slower than the 4.1% noted previously in June. Yet, since wages have outstripped inflation, there's an uptick in workers' purchasing power, a rare occurrence amid global economies.

Financial markets, as noted in overnight analyses, reflect only a 12% expectation of rate relief during the RBA's forthcoming December discussions. This forms part of broader monetary strategies amid uncertain economic climates.

Published:Friday, 15th Nov 2024
Source: Paige Estritori

Share this news item:

Finance News

AI in Financial Planning: Unlocking Potential with Prudence 21 Nov 2024: Paige Estritori Artificial Intelligence (AI) has rapidly become a focal point in modern financial planning, offering the potential to transform how advisers interact with clients. By providing automated solutions for routine tasks and analyzing vast data sets, AI promises increased efficiency and more personalized financial recommendations. - read more

Financial Advisory Expansion: Balancing Growth and Regulatory Challenges 20 Nov 2024: Paige Estritori The financial advisory sector in Australia is poised for significant expansion, with the potential to extend advisory services to an additional 650,000 clients. This promising development hinges on resolving existing regulatory barriers. A detailed analysis by Empower Business Advisory, sponsored by Colonial First State, underlines this potential shift in the industry landscape. - read more

Aussie Homeowners Show Resilience Amidst Rising Interest Rates 20 Nov 2024: Paige Estritori Amid the global economic shifts, Australian homeowners, notably exposed to fluctuating interest rates, have defied pessimistic predictions and demonstrated resilience. Unlike many countries, most Australian mortgages are subject to variable interest rates, which heightens sensitivity to cash rate changes. - read more