Upbeat Australian Employment fuels hope of more rates from RBA

The release of the better-than-anticipated Australian Employment data has added to troubles for the Reserve Bank of Australia (RBA), which is devoting significant time to bringing down the elevated inflation. In February, the Australian economy added fresh 64.6K payrolls, significantly higher than the consensus of 48.5K. Investors should note that the Australian economy reported 11.5K lay-offs in January. The Unemployment Rate has been trimmed further to 3.5% from the estimates of 3.6% and the prior release of 3.7%.

This indicates that the labor demand is extremely solid and further requirements of talent will be offset by higher offerings from the firms. Escalating labor cost index is sufficient to fuel inflationary pressures further. RBA Governor Philip Lowe might continue to target more rates as a higher laborforce in action would result in spiking inflationary pressures further.

Earlier, Australian Consumer Inflation Expectations (Mar) data that demonstrate inflation projections for the next 12 months dropped to 5.0% from the consensus of 5.4% and the former release of 5.1%. The impact of lower consumer inflation expectations looks to fade after solid Australian labor market data.