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ISCOVER
Staff Reporter
A new spate of negative data looks set to force the Reserve Bank to cut the official cash rate again in November.
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According to AMP’s chief economist Shane Oliver, economic data released last week was generally soft, with a fall in job advertisements pointing to a soft labour market ahead.
In addition to this data, the September NAB business survey showed continued sub-par readings for business confidence and conditions.
Moreover, consumer confidence lifted just 1 per cent in September. As such, confidence is currently sitting below where it was after the November rate cut last year.
Speaking about the negative data, Mr Oliver said the RBA is set to cut rates again in November – taking the official cash rate to 3.00 per cent.
“While employment rose by a reported 14,500 jobs in September, the overall picture painted by the September labour force report is one of softness,” he said.
“ Annual employment growth is just 0.5 per cent, annual growth in hours worked is just 0.3 per cent, 12,000 jobs have been lost over the last four months, trend employment growth has turned negative and unemployment looks to be trending higher after a falling participation rate kept a lid on it over the past year or so.
“Moreover, a speech by RBA Deputy Governor Lowe highlighted the RBA is now looking beyond the low unemployment rate and paying more attention to the softness in jobs growth, weak hours worked and the fall in the participation rate. All of this is consistent with more interest rate cuts ahead, with the RBA on track to cut by another 0.25 per cent on Melbourne Cup day.”
