Today’s data and the slight improvement in the suite of other labour market indicators are consistent with the RBA being on hold for several months. Until last week we had pencilled in a rate cut for November but pushed this out to February next year. The recent improvement in confidence and stabilisation in labour market conditions is welcome but is still only tentative evidence that economic activity is improving from below-trend rates rather than just stabilising. Nevertheless, our view is that we are at or close to the bottom in this RBA easing phase. At this stage we expect that cash rate to remain around its current level through much of 2014. While low interest rates are providing a tailwind to some sectors, the Australian dollar remains above where the RBA would prefer it and the looming sharp decline in mining investment from mid next year is expected to drag heavily on overall growth.
SEEK released its internet job ads series today which was unchanged in September following a modest rise in August.
Sounds about right. UE will be back with his in depth report this afternoon.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
