Market pricing on fire
Market pricing has gone a bit nuts over recent days, with OIS pricing now implying a solid 36 per cent chance of a hike at the next Reserve Bank of Australia Board meeting on February 3 (given that there is no meeting in January 2026).
One thing that would give policymakers some pause for thought would be if the unemployment rate starting running significantly higher, but that hasn't happened to date.
The Aussie government's Jobs & Skills Australia reported that job advertisements fell by a further -1.3 per cent in November.
They've now retraced from the post-COVID highs of around 300,000 to 204,500, to be -7.2 per cent lower over the year.
The sharpest annual declines were seen in the ACT (-26 per cent), Tasmania (-21 per cent), and Victoria (-10 per cent), but with the other states and territories holding up pretty well.
Roy Morgan Research reported that combined unemployment and underemployment remained elevated for a 12th consecutive month, to be markedly higher than a year earlier.
Reported Michele Levine from Roy Morgan:
“The latest Roy Morgan employment estimates for November show overall Australian unemployment and under-employment increasing 54,000 to 3,337,000 (20.9% of the workforce, up 0.2%). Concerningly, overall unemployment and under-employment have been above 3 million for a year."
Later this morning the ABS will release the 'official' labour force survey, with the median market forecast looking for a +20,000 increase in employment, and the unemployment rate creeping only slightly higher to 4.4 per cent, seasonally adjusted.
October's unemployment rate was 4.34 per cent, so it wouldn't take much to tip things over to 4.4 per cent again.
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