Australia’s central banker advocates for a measured and gradual approach to monetary policy easing in response to a slight labor market slowdown, despite a recent rise in the unemployment rate to 4.3%. The Reserve Bank of Australia is closely monitoring inflation and employment data to determine the timing of future interest rate adjustments.

Governor Michele Bullock emphasizes that while the jobless rate increased in June, other indicators like the vacancy rate have remained stable. The labor market is expected to rebalance without significant further increases in unemployment. The RBA is focused on bringing demand and supply back into equilibrium through various adjustment mechanisms.

Following a surprising decision to hold interest rates steady at 3.85%, the RBA board is awaiting more data on jobs and inflation before considering a potential rate cut in August. Unemployment rates unexpectedly hit a 3-1/2-year high of 4.3% in June, prompting market expectations of an upcoming easing.

Despite the possibility of stronger second-quarter inflation data, the RBA remains committed to a gradual approach to easing monetary policy. Core inflation has slowed to 2.9% in the first quarter, aligning with the RBA’s target band of 2% to 3%. The central bank aims to balance inflation and labor market stability in its policy decisions.

Governor Bullock underscores the importance of maintaining inflation target goals while preserving labor market gains. Australia’s approach to interest rate adjustments has been more conservative compared to other economies, potentially requiring less drastic rate cuts in the future. The RBA continues to assess economic data to inform its monetary policy decisions.

Read more at Yahoo Finance: Australia central bank not shocked by jobless rise, to cut rates gradually