spi update, page-7

australia s sept jobs data The ongoing strong labor market within Australia has added to risks that the Reserve Bank of Australia will raise interest rates by 25 basis points to 6.25 pct at its November meeting, market economists said.

They said the data confirms the central bank's concerns of high resource utilization adding to inflationary pressures which were again highlighted in a speech overnight by the RBA governor Glenn Stevens.

ANZ Banking Group economist Riki Polygenis said in a note: 'The economy remains capacity constrained and household incomes continue to be boosted by employment gains and wages growth.'

'We continue to expect another 25 basis point rate rise before year end, most likely in November.'

The Australian Bureau of Statistics (ABS) earlier released data showing Australia's unemployment rate was steady at a seasonally adjusted 4.8 pct in September from August.

The August unemployment rate was revised down from the previous estimated rate of 4.9 pct.

The ABS said that on a seasonally adjusted basis the number of people employed increased by 31,400 to 10.2952 mln compared with consensus forecasts of a 33,000 fall.

'The strong employment gain in September comes on top of an already extraordinary run of employment growth so far this year,' ANZ's Polygenis said.

'From a monetary policy standpoint, such an unequivocally strong labor force scorecard can only boost the case for further tightening this year.'

Market economists said that the September quarter inflation data due for release on Oct 25 will be key to the RBA's mindset in determining monetary policy at its Nov 7 meeting.

They noted the RBA governor Stevens commented overnight that interest rates are more likely to rise than fall.

HSBC Australia and New Zealand chief economist John Edwards said in a note: 'The September jobs report confirms the persistence of strong employment growth, lending weight to the interpretation that the economy is stronger than the national accounts suggest.'

'It would now take an unexpectedly mild inflation report on Oct 25 to prevent a 25 basis points being agreed at the RBA board meeting Nov 7 board meeting.'