Australia central banker sees signs of labour market easing
But he cautions against reading too much into a month of data
Christopher Kent, assistant governor of the Reserve Bank of Australia (RBA), observed on Monday (Oct 19) that signs indicate the labour market is loosening faster than anticipated. However, he cautioned against drawing too much from a single month's data. The unemployment rate surged to a five-year high of 4.7 per cent in September, prompting markets to reduce the chance of another interest rate hike.
Kent emphasized that predicting the labour market's tightening or loosening based on monthly data could be misleading. The central question for policymakers is whether this easing in the labour market is due to reduced demand or rising labour costs. He suggested that the upcoming quarterly inflation data would provide clarity on this issue.
Despite the RBA's earlier rate hikes aimed at combatting inflation, the underlying inflation measure remained elevated at 3.6 per cent for three consecutive months, keeping risks tilted to the upside.
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