Data is here: Australia (Oct) Employment change: +3.7K (vs. expected +18.8K)
Responses now via:
TD Securities
- Employment underwhelmed
- but full-time employment ... upward revisions to Sept were bright spots
- However, due to a lack of acceleration in wages growth, this employment report doesn't move the needle for the RBA's neutral stance, and is neutral for the markets.
- 2017 is the year of strong labour market dynamics. Jobs created to date are 80% full-time, hence the acceleration in hours worked
- As we saw yesterday, wages growth is off the floor but far from accelerating
- The next wages report isn't released until 21 February, adding to RBA patience in the first few months of 2018
- Our base case remains for +25bp in May 2018 unless wages and/or CPI materially surprise to the upside (or downside!)
Nomura:
- Mixed report
- dip in the unemployment rate to 5.4% reflected the decline in the participation rate
- Labor market continues to improve
- The improvements are yet to feed through to any meaningful acceleration in wage growth
- Excess slack remains and the subdued inflation backdrop should continue to keep the RBA side-lined
(in that 4th bullet Nomura referring to yesterday's wage growth data)
