From Bloxo:
Strong jobs growth: RBA hikes are coming
Today’s jobs numbers delivered a strong upside surprise, with 54k jobs created in August (market had 20k) driven mostly by full-time job creation. These numbers line up well with the other surveys, such as the NAB business survey, job vacancies and job advertisements, which are also showing improved labour market conditions. Despite the strong jobs growth, the unemployment rate remained steady, at 5.6%, although this reflected a sharp pick-up in the participation rate, which is another positive sign. With jobs growth lifting and GDP growth expected to pick up to an above trend pace in H2, we expect wages growth and underlying inflation to also edge higher. By early 2018, we expect the RBA to have little reason to keep its current highly accommodative stance of monetary policy. We expect the RBA to start lifting its cash rate in early 2018.
