RBA 'might hold interest rates due to job market problems'

Thursday 10 March 2011

Article by Mozo

The slow job market might encourage the Reserve Bank of Australia (RBA) to hold interest rates at their current level, it has been suggested.

Interest rates to stay at 4.75 per cent due to decline in employment figures?

Experts surveyed by the Associated Australian Press expected employment levels to rise by 20,000 in February, but data from the Australian Bureau of Statistics found that it fell by more than 10,000.

At the start of February, the bank announced its intention to leave the cash rate at the 4.75 per cent level it was set at in November 2010.

The RBA noted that employment growth was "unusually strong" in 2010, but that it was expected to slow this year.

CommSec economist Craig James said: "The jobs data gives the Reserve Bank further reason to stay on the interest rate sidelines."

The country's second largest bank Westpac voiced a similar view in a statement released today (March 10th), saying the figures gave the RBA "some breathing space to sit on the sidelines and watch the data flow".

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