Australia’s employment growth is expected to stall in June. Most of the leading indicators suggest a sharp slowing in employment growth is due, according to the latest report from ANZ Research.
In addition, an unwind of election related employment is likely to impact the June report. Looking beyond the June report, the ANZ Labour Market Indicator points to the unemployment rate holding around 5.2-5.3 percent in the second half the year.
The Reserve Bank of Australia (RBA) can make progress toward an unemployment rate of 4.5 percent or lower without giving the economy additional stimulus.
"We think the RBA’s forecast update in August will recognise that at least one further rate cut is needed. But the RBA may decide to delay delivering that rate cut for a month or two," the report added.
Some reports suggested the consumer and business confidence data this week was disappointingly soft. We are inclined to be cautious in interpreting the numbers this way.
"All up we don’t think this week’s data provided the ‘smoking gun’ the RBA seems to need to ease as soon as next month. A weak employment report and soft CPI data may provide the impetus," ANZ Research further noted.