The economic week in review
Below is CBA economist Lucinda Jerogin’s round-up of this week’s economic data: Key points: Australia’s seasonally adjusted unemployment rate rose to 4.7% in September on the back of a 39.4k decline in employment and the participation rate easing from 67.0% to 66.8%. However, in trend terms unemployment held at 4.6%. The RBA Board Minutes from The post The economic week in review appeared first…
This week's economic data revealed a tightening labour market, supported by the September Labour Force Survey which showed employment falling by 39.3k, following August's upward revision of 29.3k. The participation rate slipped from 67.0% to 66.8%, keeping the unemployment rate at 4.7%. However, the ABS recommends using trend estimates for better guidance of underlying momentum, which still suggests the unemployment rate was unchanged at 4.6% in September.
The September Monetary Policy Board's Minutes displayed a hawkish stance, emphasizing upside inflation risks from the Middle East escalation, AI-driven data centre expansion and potential domestic capacity pressures. Yet, Governor Bullock's post-meeting remarks were more dovish, expressing hope that the four hikes this year would suffice.
Expectations remain for the cash rate to remain on hold, but November's meeting remains open. RBA Deputy Governor Hauser's upcoming speech and the Q3 CPI on October 28 will be key indicators. Meanwhile, wage growth held steady at 0.8%/quarter in September, while monthly wage growth dipped to 3.3%/year, mainly due to July's anticipated wage increases.
The NAB business survey showed a sharp decline in business confidence to -13, the weakest result since May, with overall business conditions at -1. Overseas geopolitical risks escalated due to the US-Iran and Russia-Ukraine conflicts, with the Middle East diplomatic solution as the most likely outcome.
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