Australia’s Labor Market Adds Another Strong Month In Jobs

The data underlined that Australian employers added more full-time job amid the jobless rate staying the lowest in seven years.

The jobs report boosted the confidence of the policymakers in the Australian economy. Official data showed that the economy added a total of 39,100 jobs during January. This came as December’s payroll figures scored lower to a still substantial number of 16,900.

australia labour markets

 

January’s payroll figures beat the estimates which pointed to a 15,000 increase during the month. While the Australian dollar surged on the news, the gains did not hold. One of the major banks in Australia, Westpac Banking Corp. announced a rate cut later this year.

The announcement came as the bank cited slowing economic growth and moderate inflationary pressures. The bank, in its outlook, however, pointed to the latest jobs report as a risk to its financial outlook.

RBA keeping steady interest rates

The data comes as the RBA held its monetary policy meeting, and kept the key interest rates unchanged at 1.50%. This saw Australian interest rates holding steady for nearly two and a half years. Officials continue to stay hopeful for the labor market to pick up strength which could push wages and inflation higher.

The markets are currently expecting the RBA to hold interest rates at 1.50% for at least until early 2021.

Australia’s property market has been in decline and is a significant cause for concern among the policymakers.

The significance of the jobs report was crucial as recently, Guy Debelle, the deputy governor the RBA, talked about the importance of the labor market in the economy. “Our main job is to make sure that the economy continues at a reasonable pace, with a low level of unemployment,” he said, noting that it was vital as it allows people to manage their mortgages.

The RBA Governor Philip also said that the RBA would be looking to a rate cut only if the unemployment rate continued to rise.

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