The Reserve Bank of Australia has a two prong mandate:
- price stability (keep inflation in a 2 to 3% band or so)
- full employment
- (a stable currency if you insist on a third prong)
While inflation has been rising here in Australia, a concern for the RBA, the labour market had been showing signs of deteriorating. This posed a (small) dilemma for the RBA, if the labour market kept deteriorating it’d hamper the fight against inflation. That cocnern has been put on hold for now with this jobs report:
Like it say above:
- The unemployment rate dropped.
- Employment change is twice what was expected.
- Full time jobs surged.
There will be no interest rate cut from the Reserve Bank of Australia in the immediate future, I think we can reassess this perhaps towards the end of Q1 next year. The RBA is on hold until then.
The Australian dollar jumped after the jobs report.
This article was written by Eamonn Sheridan at investinglive.com.