Labour market still hot with more than 60,000 jobs added last month, says ABS

A “remarkable” run of strong jobs growth in Australia will likely slow down any move by the Reserve Bank to cut interest rates, economists say.

About 64,000 new jobs were created in September, according to Australian Bureau of Statistics data released on Thursday.

That’s another month well above market expectations, and more than 50,000 of those roles were full-time.

“Today’s labour market figures suggest the jobs market remains unquestionably strong,” HSBC chief economist Paul Bloxham said.

“The figures delivered another significant upside surprise to employment, the participation rate rose to yet another all-time high, and the unemployment rate was at 4.1 per cent.”

Mr Bloxham said the numbers were better than the RBA would have expected, and meant an interest rate cut is not likely until the June quarter next year. That’s towards the latter end of market expectations.

But Betashares chief economist David Bassanese said rate cuts would be “delayed not denied”. He said the strong jobs market would mean the RBA would focus on inflation, rather than worrying about a weak economy.

EY senior economist Paula Gadsby said the labour market’s strength was “remarkable”.

The unemployment rate was well below the average in the five years before COVID-19, she said, contrasting with other big economies.

The jobless rate is believed to be below the long-term sustainable level known as full employment, however.

“The Reserve Bank remains alert to the risk the strong jobs market poses to inflation, especially if productivity growth remains weak,” Ms Gadsby said.

“This is one of the key reasons the Reserve Bank is not ready to lower the cash rate just yet.”

Treasurer Jim Chalmers said more than one million jobs had been created in this term of Parliament, “a pretty remarkable achievement in a slowing economy”.

“We welcome the fact that the majority of these million new jobs are full time and around half are for women,” he said.

“We’re all about more people working, earning more and keeping more of what they earn and this shows we’re making good progress.”

Earlier this week, Judo Bank said “Australia’s labour market has consistently seen more employment growth than expected in 2024”.

“The only reason the unemployment rate is even rising is the strong net migration numbers.”

The bank said the market forecast was about 18,000 new jobs in September.

On Wednesday night, markets had priced in just a 16 per cent chance of a rate cut at the Reserve Bank’s next meeting in November.

More to come.