Strengthening job ads could keep RBA sidelined for some time

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An RBA rate cut may be some way off with new figures showing an improving job market.

ANZ's Job Ads series showed improvement for October, with the number of job advertisements up 0.4% from September. This followed a sharp rise of 3.8% month-on-month in September. The result sees job ads 12.1% on a seasonally adjusted basis than a year ago.

“The improving trend in job advertising is good news. Despite some challenges, the economy overall is currently tracking along pretty well," ANZ chief economist Warren Hogan said.

Hogan said the parts of the economy least affected by the ongoing resources downturn saw a strengthening job market.

"In particular, many services industries are experiencing relatively strong demand, and these industries are typically quite labour intensive."

The figures may provide little scope for an RBA cut in the near future. But Hogan said support of labour intensive sectors was likely to wane in the first half of 2016.

"Our view remains that this will ultimately prove too uncomfortable for the RBA and a little more monetary policy support will be provided by mid-2016.”

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