Australia: Still tight labour market makes near-term rate cut unlikely – UOB Group

Australia’s seasonally adjusted unemployment rate came in unchanged at 4.1% in Oct, in line with the consensus estimate, UOB Group’s economist Lee Sue Ann notes.

RBA near-term cut seems unlikely

“The unemployment rate held steady at 4.1% for a third straight month in Oct, and Reserve Bank of Australia (RBA) Governor Michele Bullock warned that the jobs market remained tight despite a gradual slowdown in hiring.”

“Separately, the Wage Price Index (WPI) remained unchanged at 0.8% q/q in 3Q24, below market forecasts for a 0.9% q/q rise. Annual pay growth slowed to 3.5% for 3Q24, from 4.1% in 2Q24.”

“It now looks increasing likely that the RBA will only deliver the first rate cut in 1Q25. We will wait for Oct inflation data due 27 Nov before finalising our forecasts for the OCR.”