In October, three economic data points were released by the Australian Bureau of Statistics which we expect will play a key role in the November Reserve Bank of Australia’s (RBA) official cash rate decision:
- The national unemployment rate, which decreased from 3.7% in August to 3.6% in September,
- CPI inflation, which increased from 0.8% in the quarter ending 30 June to 1.2% in the quarter ending 30 September, and
- retail sales, which saw a seasonally adjusted increase of 0.9% month-on-month in September 2023 and an increase of 2.0% compared to the same month last year.
Speaking before the Senate Economics Legislation Committee on the 26th of October, RBA Governor Michele Bullock said she was unable to answer whether or not the September quarterly inflation data released by the Australian Bureau of Statistics will affect the central bank’s inflation forecasts and monetary policy.
That said, with unemployment near historical lows, CPI inflation coming in higher than previously anticipated and strong retail sales, many in the market are anticipating a target cash rate increase next Tuesday. All four major banks are predicting that the RBA will increase the cash rate by another 25bps, bringing it to 4.35% in the November meeting.
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