SYDNEY (Reuters) – Australia’s central bank is surprised by strong job growth, according to Deputy Governor Andrew Hauser, who noted policymakers are ready to adjust to economic changes.
Hauser explained that the robust job market may indicate high demand or weak supply in the economy.
In September, employment exceeded expectations for the sixth consecutive month, with the unemployment rate steady at 4.1%. This tight labor market reduces chances of immediate rate cuts.
“We’re data dependent, but not data obsessed,” Hauser said, emphasizing the importance of the broader economic context.
While the economy has slowed due to high interest rates, inflation remains persistent, leaving only a 26% chance of a December rate cut.
Swaps suggest the first rate cut may only occur in April next year.
Hauser highlighted the uncertain economic outlook and the RBA’s readiness to adjust policies as needed.
The RBA has kept rates at 4.35% since November, aiming to control inflation while protecting jobs.
Hauser stated that the bank chose not to tighten rates further to safeguard employment, indicating inflation may take longer to decrease.
`
