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Strong labour market doesn’t mean RBA will tighten

The stronger than expected labour market data will have been a nice surprise to the RBA with the unemployment rate now below its year-end forecast. But we had always expected the unemployment rate to fall faster than the RBA was anticipating. And the Bank now recognises there is still considerable slack in the labour market. So we are sticking to our forecast that the Bank will extend its asset purchase programme once more.

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