SYDNEY (Reuters) – Australian employment again surprised on the upside in September, while the jobless rate held steady, reinforcing the view that the labour market remains tight and rate cuts could be some time off.
The Australian dollar rose 0.4% to $0.6691, rebounding from a one-month low, while three-year bond futures fell 6 ticks to 96.21.
Markets pared the chance for a first interest rate cut in December to 30% from 46% before the data.
Figures from the Australian Bureau of Statistics on Thursday showed net employment surged 64,100 in September from August, when they rose a downwardly revised 42,600. That was well above market forecasts for a 25,000 rise, and most of the gains were in full-time employment.
The jobless rate held relatively steady at a downwardly adjusted 4.1%, from 4.2% the previous month, where it has generally been over the past six months, noted the ABS.
The participation rate edged up to another all-time high of 67.2%, while hours worked rose another 0.3%.
“Job growth has been remarkably strong over the past year, defying a marked slowdown in economic growth,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
“We do think they support our view that a rate cut is further away than the market currently thinks. We still see the first RBA rate cut coming in Q2 2025. “
Bjorn Jarvis, ABS head of labour statistics, noted that there are still large numbers of people entering the labour force and finding work in a range of industries.
The RBA has held its policy steady since November, judging the current cash rate of 4.35% – up from 0.1% during the pandemic – is restrictive enough to bring inflation to its target band of 2-3% while preserving employment gains.
However, underlying inflation has remained sticky and the labour market is only slowing gradually, a reason that the RBA has all but ruled out a rate cut this year, lagging other major central banks in kick starting an easing cycle.
