Week in review

• Australia unemployment rate steady at 4.1%
• U.S. CPI inflation 2.6% y/y
• Australia consumer confidence rose 5.3% m/m

Week ahead

• RBA meeting minutes
• Eurozone composite PMI survey
• U.S. composite PMI survey

Thought of the week

Australia’s unemployment rate remained steady at 4.1% in October, unchanged from September and August. This suggests the labour market is stabilising at a relatively lower unemployment rate and one that is still “tight”. However, wages have peaked, with wage index falling in the third-quarter to 3.5% y/y, the lowest since 2022. The fall in wage growth should alleviate some of the RBA’s near-term inflationary concerns, allowing for rate cuts to start next year. Nonetheless, the still tight labour market underscores the longer-term inflation implications. While the economy is slowing, employment is rising meaning productivity, as measured by output per worker, is declining. Typically, a more productive economy is associated with lower inflation as production costs and prices can be reduced. A more productive economy can grow its way out of inflation.

The Australian labour market is stabilising at a lower unemployment rate

Source: ABS, J.P. Morgan Asset Management. Data reflect most recently available as of 15/11/24.
All returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.

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