SYDNEY (Reuters) – Australia’s central bank is surprised by strong job growth, according to Deputy Governor Andrew Hauser, who stated that they are prepared to adjust policies based on economic changes.
Hauser mentioned that the robust job market might be due to excessive demand or weak supply. In September, employment outperformed expectations for the sixth consecutive month, keeping the unemployment rate stable at 4.1%. This tight labor market reduces the likelihood of immediate interest rate cuts.
“We rely on data, but we don’t fixate on it,” said Hauser at a Commonwealth Bank conference, emphasizing that they consider data within the broader economic context.
Despite a slowing economy due to high interest rates, inflation remains persistent, with markets indicating only a 26% chance of a rate cut in December and a full rate cut expected around April next year.
Hauser expressed awareness of economic uncertainties and affirmed that policies are ready to adapt as necessary. The Reserve Bank of Australia (RBA) has maintained a cash rate of 4.35% since November, from a pandemic low of 0.1%, aiming to balance inflation control with job maintenance.
Hauser noted that the decision to hold rates steady was to safeguard employment gains, indicating that inflation will decrease gradually, requiring patience on rate adjustments.
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