SYDNEY: Australian unemployment has jumped more than expected, while the economy has added fewer jobs, signalling the labour market is loosening and adding to the case for the Reserve Bank of Australia (RBA) to resume lowering interest rates as soon as next month.
The jobless rate climbed to 4.5% in September from an upwardly revised 4.3%, data from the Australian Bureau of Statistics showed. Employment advanced 14,900 – compared with an expected 20,000 – while the participation rate climbed to 67%.
Yields on policy-sensitive three-year government bonds slumped 11 basis points, the most since May, as traders boosted bets on further RBA easing this year. The currency slid 0.5%.
Jobs data is crucial for the RBA’s rate-setting board as the resilience of the labour market, and worries about its tightness potentially rekindling price pressures, have been among factors driving a cautious approach in the current easing cycle.
Third-quarter inflation due out in just under two weeks may make or break expectations for the November board meeting. Traders see a 70% chance of an easing next month from the current 3.6% cash rate, while most economists predict the RBA will lower its benchmark to 3.35%. — Bloomberg
