Australian jobs data weakens case for Feb 2025 Reserve Bank of Australia interest rate cut

CBA:

• The labour market data, coupled with the decline in wages growth,supports ourview that the non-accelerating inflation rate of unemployment (NAIRU) is comfortably below the RBA’s implied estimate of 4.5%.
• But the labour market data today does not strengthen the case for a February RBA rate cut(indeed it weakens it).
• Notwithstanding we stick with our call for a 25bp rate cut in February given our expectation for the Q4 24 trimmed mean CPI to come in below the RBA’s forecast.
• The December labour force survey, due 16 January, will also be a key input into the February RBA Board decision

ANZ:

• “Softer economic data from the recent national accounts
  release raised the risk of a February cut, but this labour
  market result offsets that risk somewhat”

NAB:

• “There is one more employment print and the Q4 CPI ahead of
  the RBA’s February meeting. While we expect Q4 CPI to be a little below the RBA’s
  November forecast, that alone is unlikely to be enough to see
  the RBA cut in February given the labour market continues to
  suggest little urgency for the RBA to adjust policy settings.

The data is here:

• Australia November unemployment rate 3.9% (vs. 4.2% expected)… did a double take on that

• AUD/USD back above 0.6400 after the very solid jobs report

This article was written by Eamonn Sheridan at www.forexlive.com.