Central bank chiefs could set the table for an interest rate cut when they speak after a shock unemployment jump.
Reserve Bank Governor Michele Bullock and key lieutenant Brad Jones will address events this week, a fortnight before they meet and ponder a fourth interest rate cut for 2025.
Australia’s jobless rate jumped to 4.5 per cent in September, the four-year high far exceeding predictions from analysts and economists.
Heightened expectations of an interest rate put the local share market into overdrive and record its highest-ever close on Thursday.
A cut would be welcome news for the Australian Council of Social Service, which pointed out there are now two people unemployed for every job vacancy.
“Keeping interest rates high is hammering jobs and livelihoods,” CEO Cassandra Goldie said.
“The greatest risk to the economy now is not a resurgence in inflation but the further loss of jobs and incomes.
“Urgent rate cuts are essential to support job creation and prevent further rises in unemployment.”
Ms Bullock will deliver the Bradfield Oration on Friday.
Before the surprise jobs data, she described the jobs market as a bit tight, meaning there are more jobs than available workers.
“But we look at a lot of different indicators of the labour market, so those two things (inflation and employment) suggest to us that maybe it’s a little tight but it’s close to balance,” she said.
Labour force figures contributed to the Reserve Bank keeping the cash rate on hold at September’s meeting, with the recent data appearing to pave the way for a 0.25 per cent trim.
“The underemployment rate had edged lower while other measures of labour under-utilisation had been broadly stable,” minutes from the meeting read.
William Buck chief economist Besa Deda said good news was on the way for borrowers.
“Governor Bullock’s description of monetary policy as ‘marginally tight’ at a Washington forum reinforces our view that further easing is ahead,” she said.
“We maintain our forecast for two more rate cuts before mid-next year, with the next cut in November.”
Wall Street investors are meanwhile assessing Donald Trump’s latest remarks on tariffs.
The US president says his proposed 100 per cent impost on goods from China won’t be sustainable but is blaming Beijing for the latest impasse in trade talks.
The S&P 500 climbed 0.53 per cent on Friday to end the session at 6,664.01 points. The Nasdaq gained 0.52 per cent to 22,679.98 points and the Dow Jones Industrial Average rose 0.52 per cent to 46,190.61 points.
Australian share futures were paused, down seven points or 0.07 per cent, to 14,507.
The S&P/ASX200 fell 73.1 points on Friday, down 0.81 per cent, to 8,995.3, as the broader All ordinaries dropped 82.7 points, or 0.88 per cent, to 9,293.2.
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