Australia: Labour market remains (very) tight – UOB

Economist at UOB Group Lee Sue Ann reviews the latest jobs report in Australia.

Key Takeaways

“Australia’s seasonally adjusted unemployment rate fell to 3.5% in Feb, hovering around a 50-year low, from 3.7% in Jan, and against expectations of 3.6%. Seasonally adjusted employment increased by 64,600 people, from a revised fall of 10,900 people (11.500 fall previously). Full-time employment increased by 74,900, while part-time employment fell by 10,300.”

“The latest jobs data underscores the economy’s resilience, with labour market strength a key factor in the Reserve Bank of Australia (RBA)’s confidence that the economy can avoid a recession despite the aggressive monetary tightening cycle. The RBA expects unemployment to hold around 3.5%-3.6% through mid2023.”

“We are keeping our view of one more 25bps hike in Apr, which will take the OCR to 3.85%. Any changes to our forecasts will depend on incoming economic data. Financial stability concerns will also be a crucial factor given the current problems in the banking sectors in the US and Europe.”