Australia: Another stronger labour report – ING

According to Prakash Sakpal, Economist at ING, Australia’s strong jobs growth will need to translate into consumption, which hasn’t been the case so far in support for an early RBA rate hike.

Key Quotes

“Australia’s September labor report was another upside surprise, with 19.8k jobs growth and a further fall in the unemployment rate to 5.5% from 5.6% in August (consensus: 15k and 5.6%). Part-time jobs rose by 13.7k, almost same rise as in August, while there was a sharp slowdown in the full-time jobs to 6.1k from 39.5k. The participation rate was steady at 65.2%.”

“Steady part-time jobs growth and participation rate indicate that that even new entrants to the labor force are finding it easy to obtain work. However, strong jobs growth needs to translate into private consumption, which hasn’t been the case so far. A dismal retail sales growth in August reduced the likelihood of an early RBA rate hike.”