RBA governor dismisses jobs fears but hints at rates hold after inflation uptick
The Reserve Bank governor has dismissed warnings of rising unemployment and hinted at an interest rate hold, saying the labour market will not “fall off a cliff”,Michele Bullock said the RBA had been surprised by September’s jump in joblessness and an uptick in inflation but emphasised job creation was slowing broadly as the RBA expected,“There are still jobs being created, just not as many,” Bullock said on Monday night,“We’d always thought [unemployment] would drift up a bit,Maybe it’s drifted up a bit further than we thought, but it’s not a huge amount yet.
”In recent weeks the RBA has received two unwelcome and contradictory signals about the September quarter: inflation has come in substantially hotter than expected, while the jobs market has run colder,The rise in unemployment to 4,5% blew past the RBA’s own forecasts and prompted calls for further interest rate relief as early as next week,Speaking at an Australian Business Economists dinner in Sydney, Bullock said the job market’s strength had been a highlight of her two-year tenure as governor but downplayed its weakening as a byproduct of slow economic growth,“This is bringing the labour market back more to balance … We think we’re close-ish,” Bullock said.
“There’s still signs out there that the labour market’s a little bit tight and that it’s not actually going to, all of a sudden, fall off a cliff,”Bullock said the RBA board would have updated predictions at its meeting next week when it would decide whether to focus on inflation or support the slowing jobs market, which would mean more interest rate cuts,Luci Ellis, Westpac’s chief economist and a former top RBA official, said Bullock’s speech showed forthcoming inflation data would determine the outcome of that meeting,The consensus among economists is for inflation to leap from 2,1% in the year to June, to 3% in September in Wednesday’s quarterly report from the Australian Bureau of Statistics.
A sharp rise would be a well-anticipated result of the end of government power bill subsidies, which will continue to roll off into 2026.Electricity prices could climb by more than 9% in the three months to September, and leave them 24% higher than a year earlier, according to Barrenjoey, an investment bank.While Australians will be squeezed by the end of power bill relief, more alarming for the RBA is an acceleration in underlying inflationary pressures.These are best represented by the bank’s preferred “trimmed mean” measure, which removes large, one-off moves (such as electricity) and provides the best steer for interest rate decisions.Here the consensus is for underlying inflation of 1% in the quarter, a marked rise from the previous three-month period.
That would leave the annual rate unchanged at 2.7% and represent a concerning stalling in a downward trajectory stretching back to the end of 2022.Bullock acknowledged on Monday night that such an outcome would represent a significant break from the RBA’s forecasts.Johnathan McMenamin, the head of economic forecasting at Barrenjoey, said: “It’s a complex set of numbers for the RBA to navigate.”If the RBA holds off on rate cuts for too long than they risk the economy’s “soft landing” that has seen inflation drop sharply over recent years without a major rise in the jobless rate, which remains well below the 5%-plus rates that prevailed before the pandemic.
“They are very proud of the gains they have made on the labour market and the unemployment rate and they would still want to preserve that.But I don’t think they will jump at one monthly jobs figure,” McMenamin said.McMenamin is predicting inflation will come in substantially stronger and far above what the RBA’s economists had predicted.This could send the RBA’s underlying measure up to 2.8% – the first increase in nearly three years.
That would delay a rate cut well into next year,Belinda Allen, CBA’s head of Australian economics, said after coming off a period of historically high inflation, fear of having to restart the battle in 2026 would keep the RBA focused on price pressures,Allen has the next rate cut penciled in for February, at least for now,
My cultural awakening: A Jim Carrey series made me embrace baldness – and shave my head on the spot
I was a mess of insecurities, trying to hide thinning hair, worried I was ageing too quickly. Then a scene in the TV show Kidding changed everythingGrowing up, I was obsessed with Jim Carrey. I was just entering my teens when The Mask came out, and I can still picture myself watching Ace Ventura: When Nature Calls on TV one weekend afternoon, absolutely howling at the silliness of it. His elastic facial expressions, the energy, the stunts – it was the perfect tenor of humour for a young boy.By the time I was in college, I had moved on to his more thoughtful films
From Springsteen: Deliver Me from Nowhere to IT: Welcome to Derry – your complete entertainment guide to the week ahead
Jeremy Allen White channels the Boss in a hotly tipped new biopic, and Pennywise the clown returns to terrorise unsuspecting children in a spooky horror prequel seriesSpringsteen: Deliver Me from NowhereOut now The Bear’s Jeremy Allen White plays the Boss in this buzzed-about Bruce Springsteen biopic focusing on the period when he was making his 1982 album Nebraska (so, post-Born to Run but pre-Born in the USA), with Jeremy Strong playing critic turned producer Jon Landau.The MastermindOut now Kelly Reichardt returns with an art heist movie inspired by a real robbery in 1970s Massachusetts, in which two Gauguins, a Picasso and a Rembrandt were nicked. Here, it’s Arthur Dove paintings that catch the eye of Josh O’Connor’s art thief James Blaine Mooney.ParaNormanOut now An odd dearth of family films has left a gap in the market into which this rerelease of 2012’s animated adventure ParaNorman has decided to slip. Norman Babcock (Kodi Smit-McPhee) is the misfit 11-year-old who speaks with the dead, enabling a spooky adventure to unfold in time for Halloween
John Deere obituary
My father, John Deere, who has died aged 89, was the arts director of Nottingham county council for 20 years. A passionate advocate for the arts, he was appointed to the post in the council’s newly established leisure services department in 1975, following the national reorganisation of local authorities.There, for 20 years, he transformed the artistic life of Nottinghamshire through development and funding of arts activities across the county. In the town of Retford, he supported the internationally famous Cantamus girls choir and, in Mansfield, the Mansfield Palace theatre.Events ranged from concerts by world-renowned musicians such as Vladimir Ashkenazy, André Previn and the pianist John Ogdon, a native of Nottinghamshire, to poetry readings by established poets such as Aeronwy Thomas, Dylan’s daughter
Timely assurance from Lear’s Kent | Letters
The passing of John Woodvine (Obituary, 13 October) reminded me of the time when four of us University of East Anglia students went to the Norwich Theatre Royal to see the Actors’ Company touring King Lear in June 1974.We were early and went for a something to eat at a newly opened “burger” style restaurant with booths and partitions so you couldn’t see who was at adjacent tables – a novelty at the time. The service was very slow and we were concerned that we would be late for the theatre.Suddenly a head appeared over the partition and said: “Don’t worry – they won’t start without me!” It was John Woodvine, who turned out to be the Earl of Kent and was the first to speak in the play. Needless to say we made it in time
The Guide #214: Sleep-inducing songs and tranquilising TV – the culture that sends us to sleep (in a good way)
How do you sleep at night? If you’re like Hannah, a recent subject of the Guardian’s My cultural awakening column, it’s to the sound of a rat whisking eggs. The series shares stories of people who made a significant life change thanks to a piece of popular culture, and in the case of Hannah, that meant curing insomnia by watching Ratatouille. Every night for the last 15 years, at home or abroad, she switches on the Pixar classic and, within minutes, finds herself dropping off, thanks to the film’s comforting, consistent soundscape. It’s so effective, in fact, she’s never even seen it all the way through.Hannah’s might be a bit of an extreme example, but her tale does touch on something universal: culture seems to play an increasingly important role these days in helping people nod off
Seth Meyers on Trump’s White House ballroom: ‘This couldn’t be any more of a bait and switch’
Late-night hosts mocked Donald Trump’s demolition of the East Wing of the White House and the corporate sponsors of his $300m gilded ballroom.On Thursday’s Late Night, Seth Meyers expressed disbelief over the president’s gilded ballroom project for the White House. “It would be bad enough if Trump’s biggest priority was just building a gilded vanity project for himself, but it’s so much worse,” he said. “Because to do it, he’s tearing down a somewhat well-known and beloved piece of property.”That would be the entire East Wing of the presidential residence, which has stood for 120 years
Could the internet go offline? Inside the fragile system holding the modern world together
Fare game: what the battle between taxis and Uber means for your airport trip in Sydney and Melbourne
Amazon strategised about keeping its datacentres’ full water use secret, leaked document shows
AI models may be developing their own ‘survival drive’, researchers say
‘He’s one of the few politicians who likes crypto’: my day with the UK tech bros hosting Nigel Farage
‘Sycophantic’ AI chatbots tell users what they want to hear, study shows