A spike in Australia’s jobless figures will loom over Australia’s economy, as the Reserve Bank prepares to offer its first clues on how it perceives the increase.
Unemployment rose to a five-year high of 4.7 per cent in September, according to figures from the Australian Bureau of Statistics, above economist predictions of 4.6 per cent for the month.
The fall in employment, by almost 40,000, was softer than expectations.
The data has raised the prospect of the central bank keeping interest rates on hold when it next meets on Melbourne Cup day in early November.
Unemployment is already above the RBA’s forecast of 4.5 per cent for the December quarter, with governor Michele Bullock previously indicating higher unemployment was needed to bring inflation down.
The Reserve Bank has not offered commentary on the moves in the unemployment rate, but will have the chance to do so on several occasions in coming days.
The bank’s assistant governor Chris Kent will speak in a fireside chat at the Commonwealth Bank’s global markets conference on Monday.
The RBA’s deputy governor Andrew Hauser will also make a speech at the Citi Conference on Wednesday.
In a week where no major economic data is being presented, their comments will be closely monitored for any hints as to where November’s rate decision will go.
NAB economist Jessie Cameron said the central bank was probably not going to increase pain for mortgage holders with another rate rise.
“We continue to see the RBA on hold from here, but the risk still sits with a hike,” she said in a research note.
“The RBA is unlikely to want to fuel any further paring in pricing.”
At its last meeting, the central bank lifted the official cash rate to 4.6 per cent, the highest level in 15 years.
RBA head of payments Ellis Connolly will also make an appearance at the Australian Finance Industry Association conference in Sydney on Tuesday.
The bank’s decision to ban credit and debit card surcharges, which came into effect at the start of October, will likely be on the agenda at the summit.
The decision to stop the surcharges has caused controversy among business owners, who say they will have to pass the fees imposed by card operators on to customers in other ways.
Westpac chief economist Luci Ellis said the decision from the RBA was a logical one.
“Surcharges no longer made sense in a largely cashless economy,” she said.
“In most cases, firms will simply roll the surcharge into the sticker price, leaving the total cost to the consumer unchanged, just more transparent.”
Wall Street investors have meanwhile been left spooked with AI-related technology stocks under renewed pressure and oil prices jumping.
All three major indices closed sharply lower on Friday.
The S&P 500 declined 1.09 per cent to end the session at 7,659.44 points. The Nasdaq dropped 2.15 per cent to 26,140.03 points and the Dow Jones dipped 0.34 per cent to 52,002.41 points.
Australian share futures slipped 11 points, or 0.12 per cent, to 17,528.
The S&P/ASX200 gained 87 points on Friday, up one per cent, to 8806.7, as the broader All Ordinaries rose 100 points, or 1.13 per cent, to 8940.4.
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