SYDNEY (Reuters) – Australia’s central bank is surprised by job growth, according to Deputy Governor Andrew Hauser. He stated that the bank is ready to adjust policies based on economic changes.
Hauser commented on the strong job market, suggesting it may be due to either high demand or low supply. Australia has seen better-than-expected employment figures for six months, maintaining an unemployment rate of 4.1%, which reduces chances of immediate rate cuts.
“We rely on data but are not fixated on it,” Hauser explained at a Commonwealth Bank conference, emphasizing that data’s relevance to the overall economic outlook matters for policy decisions.
The economy is growing slowly due to high interest rates, but inflation remains stubbornly high, leading to only a 26% chance of a rate cut in December. Most market expectations have rate cuts starting only in April next year.
Hauser highlighted the uncertain economic outlook, stating that the Reserve Bank of Australia (RBA) is prepared to respond to changes.
The RBA has kept rates steady at 4.35% since November to manage inflation within its target of 2%-3% while maintaining job growth. Hauser mentioned they purposefully chose not to tighten rates too quickly to protect employment gains. Inflation is taking longer to decrease, suggesting rates won’t drop soon.
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