RBA Rate Hike on Track Despite Jobless Rate Spike
Australia's unemployment rate hit its highest in five years at 4.6% in August, but financial markets are still expecting the Reserve Bank of Australia (RBA) to raise its cash rate next Tuesday.
The RBA has a 95% chance of hiking the cash rate to 4.35%, according to market expectations, and the Australian dollar has already softened to about $0.7018 due to this anticipation.
Traders are aware that the labor market is cooling at its edges, rather than cracking, with employment increasing by 39,500 in August but entirely consisting of part-time jobs.
Economists believe that higher energy prices can keep overall inflation sticky, and RBA Governor Michele Bullock has stated that an unemployment rate in the 4.5%-5.0% range could help take pressure off prices.