CBA Sees Modest Jobs Growth, Steady Unemployment Ahead of RBA Rate Decision

The Reserve Bank of Australia's (RBA) upcoming interest rate decision on September 29 may not be heavily influenced by this week's labour force data, according to Commonwealth Bank of Australia (CBA). The bank forecasts a modest increase in employment numbers, with a gain of 15,000 jobs, below the market consensus of about 20,000.

CBA expects the unemployment rate to remain steady at 4.5%, which is consistent with its view that the labour market needs to ease gradually to curb inflation. The bank's own data suggest employment growth is broadly steady but weaker than recent official figures have implied.

However, CBA notes that some job advertisement measures have picked up recently, indicating that the softening labour market may not be one-way. This could potentially strengthen the case for further rate hikes beyond September, supporting the Australian dollar and short-end yields.