UOB Group’s Economist Lee Sue Ann comments on the latest release of the Australian labour market report.

Key Takeaways

“Australia’s seasonally adjusted unemployment rate rose to 3.5% in Aug, up from 3.4% in Jul, and back to the same rate as in Jun. Seasonally adjusted employment increased by 33,000 people (0.2%) in Aug, lower than expectations for a gain of 35,000, but rebounding significantly from the fall of 40,900 in Jul.”

“Overall, the Australian labour market remains solid, although slowing growth will likely push the jobless rate higher back towards the 3.8%-4.0% levels. Wage growth is also expected to pick up to over 3% by 2023.”

“The next RBA meeting is on 4 Oct. We now pencil in 25bps hikes for the remaining three meetings in 2022. That will take the OCR to 3.10% by year-end. We then look for a pause thereafter.”