12 Feb 2015
RBA likely to cut again in March after Aus jobs - ANZ
FXStreet (Bali) - According to ANZ Economists, for monetary policy, today’s Australian job figures are more consistent with the RBA’s revised forecasts for the unemployment rate to rise further, with the bank expecting a further rate cut in H1 2015, most likely at the next board meeting in March, they say.
Key Quotes
"While the market had expected some weakening in labour force conditions in January after the surprisingly good figures in December, the increase in the unemployment rate to 6.4% was worse than feared. This is a new peak for the unemployment rate, with the previous peak 6.3% in October and November following revisions."
"The details of the report are mixed. Full-time employment declined 28.1K largely retracing the 41.6K increase in December, while part-time employment gained 15.9K."
"Meanwhile, the participation rate was 64.8% in the month, and has increased by 0.2ppt in the past three months. Also more positive was an increase in aggregate hours worked of 0.5% in the month, with average hours worked rising 0.8%."
"The rise in the unemployment rate to 6.4% suggests the surprise decrease to 6.1% in December was an outlier, with the unemployment rate continuing to track up in trend terms. This is consistent with below-trend growth outcomes and our view that the unemployment rate will rise above 6½% through this year. While new labour demand is holding up, it is not enough at present to offset retrenchments in particular industries such as mining and manufacturing or to keep up with the flow of new workers into the economy."
"For monetary policy, today’s figures are more consistent with the RBA’s revised forecasts for the unemployment rate to rise further and to stay elevated for an extended period. We expect a further rate cut in H1 2015, most likely at the next board meeting in March. We will receive more colour on this when Governor Glenn Stevens speaks to the House of Representatives Standing Committee on Economics tomorrow morning."
Key Quotes
"While the market had expected some weakening in labour force conditions in January after the surprisingly good figures in December, the increase in the unemployment rate to 6.4% was worse than feared. This is a new peak for the unemployment rate, with the previous peak 6.3% in October and November following revisions."
"The details of the report are mixed. Full-time employment declined 28.1K largely retracing the 41.6K increase in December, while part-time employment gained 15.9K."
"Meanwhile, the participation rate was 64.8% in the month, and has increased by 0.2ppt in the past three months. Also more positive was an increase in aggregate hours worked of 0.5% in the month, with average hours worked rising 0.8%."
"The rise in the unemployment rate to 6.4% suggests the surprise decrease to 6.1% in December was an outlier, with the unemployment rate continuing to track up in trend terms. This is consistent with below-trend growth outcomes and our view that the unemployment rate will rise above 6½% through this year. While new labour demand is holding up, it is not enough at present to offset retrenchments in particular industries such as mining and manufacturing or to keep up with the flow of new workers into the economy."
"For monetary policy, today’s figures are more consistent with the RBA’s revised forecasts for the unemployment rate to rise further and to stay elevated for an extended period. We expect a further rate cut in H1 2015, most likely at the next board meeting in March. We will receive more colour on this when Governor Glenn Stevens speaks to the House of Representatives Standing Committee on Economics tomorrow morning."