Back in March last year, the jobs report also delivered a surprise when it suggested robust employment growth, dashing chances of a rate cut at the time. “The question you really need to ask is ‘do I genuinely believe [that] in the space of one month the unemployment rate really jumped that much? ’” He alluded to “noise” that may have painted a worse picture than the month-to-month reality. “The labour market’s fairly soft.
Deutsche Bank chief economist Adam Boyton said that the mixed signals coming out of the Australian economy, yielding both positive and negative surprises, were characteristic of an uneven recovery. “When the economy’s on fire, everything’s on fire, all the data comes in one way,” he explained. “The fact that we’re getting negative surprises, positive surprises tells you the economy is muddling along.
However, the majority of experts still do not think the RBA will budge from 2. 5 per cent, consistent with its expectation for sub-trend growth that it had conveyed in previous statements. “If we had three numbers [like today] in a row, absolutely the RBA would be contemplating rate cuts,” said Annette Beacher, TD Securities’ head of Asia-Pacific research, FX and rates strategy.
Read more here: SMH