The Reserve Bank of Australia is likely to boost the cash rate by 25bps in December, potentially ending the year with a cash rate of 3.1%. The official cash rate currently stands at 2.85%.

ANZ senior economist Catherine Birch said the solid labour market turnout in October and the strong wage data for the third quarter of 2022 increase the odds of the RBA raising the cash rate.

“Employment rose 32,000, driven by a jump in full-time employment. This exceeded the estimated 23,000 population increase in the month, reflecting higher immigration,” she said.

Meanwhile, unemployment and underemployment edged down to 3.4% and 5.9%, respectively, taking underutilisation to 9.3% which was the lowest in 40 years.

The unemployment rate in October ended up going in an opposite direction compared to the predictions of the major banks, which forecast a lift.

Here are the other highlights from the latest labour market force data

  • Wage Price Index rose 1% quarterly and 3.1% annually in September.
  • The annual gain in wages is the highest recorded since March 2013.
  • The employment to population ratio increased 0.1 percentage point to 64.3%.
  • Adjusted monthly hours worked increased by 23%.
  • Flood events across New South Wales, Victoria and Tasmania saw more people working reduced hours due to bad weather, increasing from 66,000 people in September to 100,000 in October 2022.