Stronger-than-expected jobs data suggests a 2024 rate cut is off the cards
Economists say resilient labour market figures will mean the cash rate is likely to stay at 4.35 per cent until next year.

THE booming labour market is continuing with an extra 64,100 jobs last month, the Australian Bureau of Statistics reported.
That’s significantly more than the 25,000 economists expected and adds to widely held views among investors and most economists that the RBA will not reduce interest rates this year.
Money markets say there is less than a one-in-three chance that the RBA will lower the cash rate by December. That’s down from a 50:50 chance before the data.
Betashares chief economist David Bassanese said the September labour force report was stronger than expected.
He said it highlights the economy’s “remarkable ability to keep finding employment for the still rapidly expanding supply of new workers”.
Mr Bassanese said Thursday’s employment report “does not rule out rate cuts, though it does rule out near-term rate cuts due to an overly weak economy”.
Rather than being forced to start easing the cash rate to support an ailing economy and fast-rising unemployment, the central bank will be able to focus chiefly on inflation.
“The RBA will be comforted by today’s report, as it implies it can continue to wait for a decent decline in inflation before cutting rates,” the economist said.
September quarter inflation data, out at the end of the month, would be the key data point for the central bank board ahead of the next meeting.
The ABS report showed the participation rate rising to reach a record high of 67.2 per cent.
Head of labour statistics Bjorn Jarvis said employment has risen by 3.1 per cent in the past year, growing faster than the civilian population growth of 2.5 per cent.
“This has contributed to the increase in the employment-to-population ratio by 0.1 percentage point, and 0.4 percentage points over the past year, to a new historical high of 64.4 per cent.”
Market Economics MD Stephen Koukoulas described the results as “fabulous labour market news”.
But he said it would most likely mean the cash rate remains at 4.35 per cent for the rest of 2024.
He said: “The RBA seems reluctant to cut and today’s data will reinforce its views, even though inflation is under control and wages growth is slowing.”
Independent Saul Eslake reiterated his views that the 4.35 cash rate figure will remain until February as he thinks the RBA will wait until it gets December CPI data in late January.
But he is expecting a cut of 50 basis points.