Jobs market on display as inflation picture brightens

Australia’s labour market is tipped to keep softening little-by-little as persistently high interest rates weigh on demand for workers.

Some economists predict another tick higher in the official jobless rate on Thursday when the Australian Bureau of Statistics unveils its monthly labour force report.

AMP Australia and Commonwealth Bank of Australia economists were both expecting the unemployment rate to inch higher to 4.3 per cent in September, from 4.2 per cent in August.

The former had a 20,000 employment gain pencilled in, with the latter of the view the bureau would reveal roughly 15,000 jobs were created.

Both predictions would amount to a moderation on the 47,500 employment increase in August.

This was almost double consensus forecasts in a show of labour market and economic resilience that only added to the case for interest rates staying on hold for a while yet.

The Reserve Bank of Australia has jacked up interest rates and kept them high to slow the economy and tame inflation.

Yet in a promising sign for borrowers waiting for cuts, August consumer price data showed all-important underlying inflation heading in the right direction, falling to 3.4 per cent in August from 3.8 per cent in July.

The RBA maintains it wants to be sure inflation is moving sustainably back within the target band before reducing rates.

Further nuggets of insight into the central bank’s thinking may be revealed in a speech by assistant governor Sarah Hunter, who is due to speak on Wednesday at the Citi Australia and New Zealand Investment Conference in Sydney.

Investors on Wall Street are placing their faith in financial stocks, with the S&P 500 and Dow scoring record closing highs on Friday after banks reported strong quarterly results and the latest inflation data supporting expectations for a Federal Reserve rate cut in November.

Major financial companies kicked off earnings season with JPMorgan Chase rallying after the lender reported higher-than-expected third-quarter profit and raised its annual interest income forecast.

The S&P 500 gained 34.71 points, or 0.60 per cent, to end at 5,814.76 points, the Nasdaq Composite gained 59.71 points, or 0.33 per cent, to 18,341.76 and the Dow Jones Industrial Average rose 409.84 points, or 0.97 per cent, to 42,863.96.

Australian share futures jumped 46 points, or 0.55 per cent, to 6737.

The local share market finished slightly lower on Friday but its weekly performance was enough to make up for last week’s losses and leave it also within striking distance of an all-time high.

The benchmark S&P/ASX200 index closed down 8.5 points, or 0.1 per cent, at 8,214.5, while the broader All Ordinaries dipped 7.2 points, or 0.08 per cent, to 8,491.5.