SYDNEY (Reuters) – Australia’s central bank is surprised by strong job growth, with readiness to adapt policy as needed, said Deputy Governor Andrew Hauser on Monday.
In Sydney, he noted that the robust labor market could indicate either overly strong demand or weak supply. Australias employment exceeded expectations for the sixth month in a row, with an unchanged jobless rate of 4.1%, suggesting a tight labor market and reducing chances of a near-term rate cut.
Hauser emphasized, “Were data dependent, but not data obsessed,” highlighting the importance of context in economic indicators.
The economy has slowed due to high interest rates, but inflation remains persistent, implying only a 26% chance of a rate cut in December.
Market expectations suggest the first rate cut may not happen until April next year.
“We recognize the uncertain outlook and are prepared to respond accordingly,” Hauser added. Since November, the RBA has kept interest rates at 4.35%, aiming to control inflation while safeguarding job growth.
Hauser stated, We chose not to tighten aggressively to protect employment gains, meaning inflation will take longer to decrease and rate cuts may be delayed compared to other regions.
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