{"id":106714,"date":"2025-10-20T08:30:00","date_gmt":"2025-10-19T21:30:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=106714"},"modified":"2025-10-19T23:40:28","modified_gmt":"2025-10-19T12:40:28","slug":"rbas-tough-call-can-the-bank-keep-rates-high","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/rbas-tough-call-can-the-bank-keep-rates-high\/","title":{"rendered":"RBA\u2019s Tough Call: Can the Bank Keep Rates High with Unemployment Rising?"},"content":{"rendered":"\n

Australia’s unemployment rate has surged to a four-year high, sparking a renewed debate on whether the Reserve Bank of Australia (RBA) will adjust its interest rate policy.<\/strong> With new data showing a surprise increase in jobless numbers, analysts are revising their predictions for the RBA\u2019s next move. Pressure is mounting for a rate cut as economic conditions shift.<\/p>\n\n\n\n

On Thursday, new figures revealed that the national unemployment rate for September had climbed to 4.5%<\/strong>, up from 4.3%<\/strong> in August. This rise marks the highest jobless rate since November 2021, during the tail end of COVID-19 lockdowns in major cities. The data caught financial markets off guard, reinforcing concerns that the job market is losing its previously tight hold. With the RBA’s next meeting scheduled for Melbourne Cup Day<\/strong>, the latest figures could play a pivotal role in its decision-making process.<\/p>\n\n\n\n

Unemployment Numbers Disappoint Economists<\/h2>\n\n\n\n

According to the Australian Bureau of Statistics, 33,900<\/strong> people joined the ranks of the unemployed last month, which was far worse than expected. The September increase pushes the jobless rate above the RBA<\/a>\u2019s forecast for 2025<\/strong>, with many economists now recalculating their expectations for monetary policy. This could make a \u201cNovember rate cut more likely,” said AMP economist My Bui, acknowledging that the rise in unemployment now complicates the RBA’s outlook.<\/p>\n\n\n\n

Victoria, home to Melbourne, reported the highest state unemployment rate at 4.7%<\/strong>, which is especially concerning given the state\u2019s economic weight. The state\u2019s joblessness, along with the national rise, signals that the Australian labour market<\/strong> may be softening more quickly than anticipated.<\/p>\n\n\n

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Reserve Bank of Australia \u00a9Shutterstock<\/sub><\/sup><\/figcaption><\/figure><\/div>\n\n\n

These developments have intensified calls for action from various sectors. The Australian Council of Trade Unions (ACTU<\/a>) has demanded that the RBA lower rates, arguing that prolonged high interest rates have contributed to higher unemployment<\/strong>, with working people feeling the brunt of the economic slowdown. “Today\u2019s data shows that holding rates at restrictive levels has meant higher unemployment and more pain for working people.” said ACTU President Michele O\u2019Neil<\/a>.<\/p>\n\n\n\n

Pressure on the RBA to Act Quickly<\/h2>\n\n\n\n

RBA Governor Michele Bullock recently stated that the central bank sees the cash rate as “marginally tight” but not restrictive. Speaking in Washington, she noted that inflationary pressures\u2014especially in housing and market services\u2014may prevent a significant rate cut in the short term. However, with the latest unemployment figures bucking expectations, the RBA now faces mounting pressure to recalibrate its strategy.<\/strong><\/p>\n\n\n\n

Despite these concerns, the RBA is reluctant to make drastic moves. “Given the experience we had with the previous governor telling people what we think will happen with interest rates in six months\u2019 time, I am still very gun shy of that,” Bullock said, referencing the misleading predictions of her predecessor, Philip Lowe. <\/p>\n\n\n\n

Even so, Westpac\u2019s chief economist, Luci Ellis<\/strong>, suggested that the economic slowdown may already be having an impact, with early signs of easing financial conditions. Some experts predict that if the job market continues to deteriorate, the RBA may have no choice but to act sooner rather than later.<\/p>\n","protected":false},"excerpt":{"rendered":"

Australia’s unemployment rate has surged unexpectedly to a four-year high, throwing the RBA\u2019s future actions into uncertainty. With the pressure mounting, economists are revising their expectations for interest rates. As RBA Governor Michele Bullock hints at a potential rate cut, many are wondering what this could mean for the economy.<\/p>\n","protected":false},"author":10,"featured_media":106718,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[],"class_list":["post-106714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/106714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=106714"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/106714\/revisions"}],"predecessor-version":[{"id":106721,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/106714\/revisions\/106721"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/106718"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=106714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=106714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=106714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}