RBA to keep rates on hold until May: Oxford Economics
Cecile Lefort
Sean Langcake, head of macroeconomic forecasting for Oxford Economics, said the strong jobs data backed up the firm’s expectation that the RBA would keep rates on hold until at least May.
“The RBA board will be reluctant to ease rates while underlying inflation is above target, and the labour market is operating so close to its capacity,” he wrote in a note to clients.
He noted that while the data showed growth in headcount had cooled “a little”, it remained healthy considering the very slow pace of gross domestic product growth. He also said there was a larger than usual cohort of workers moving from unemployment to employment in the month.
“The labour market continues to defy the broader slowdown in economic activity,” he said.
“There is strong support coming through from the public sector and adjacent industries, which is keeping the market in a very tight position and masking the relative weakness in the private sector.”
