Fresh Data Warns RBA Not to Hike

Key Takeaways

• ANZ‑Indeed job ads fell 0.8% month‑over‑month in April
• SEEK job ads declined 0.4% for seven consecutive months
• Wage growth shows no breakout, staying flat since 2014
• Melbourne Institute inflation gauge rose to 2.1% YoY in May
• RBA likely to hold rates amid weakening labor market and oil prices

Pulse Analysis

The latest labour‑market indicators from ANZ‑Indeed and SEEK reveal a gradual cooling in Australia’s hiring landscape. Job ads have slipped for the first time since early 2021, suggesting firms are pulling back on recruitment as consumer demand eases. This trend dovetails with a modest rise in the unemployment rate forecast, reinforcing concerns that the economy is losing momentum after a period of robust post‑pandemic growth. For investors and policymakers, the data signal that the labour market may no longer be a buffer against inflationary pressures.

At the same time, wage dynamics remain subdued. Both the CBA Wage Insights and the Australian Bureau of Statistics’ Wage Price Index show flat or marginally negative growth since 2014, indicating that households are not experiencing the income gains that could fuel demand‑side inflation. However, the Melbourne Institute’s monthly inflation gauge ticked up to 2.1% year‑over‑year in May, driven largely by supply‑side factors such as soaring oil prices. With Brent crude projected to touch $200 a barrel, diesel rationing could curtail transport and logistics activity, further straining the economy’s productive capacity.

These mixed signals are reshaping expectations for the Reserve Bank of Australia. While the RBA’s last cash‑rate hike lifted the benchmark to 5.4%, the cumulative impact of earlier increases has yet to fully materialise in the broader economy. Given the weakening labour market, stagnant wages, and the looming energy shock, many analysts now anticipate a hold decision at the upcoming meeting. A pause would preserve financial stability, prevent unnecessary tightening, and give the central bank space to assess how global commodity volatility filters through Australian growth and inflation trends.