{"id":497861,"date":"2026-02-23T01:37:27","date_gmt":"2026-02-23T01:37:27","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/497861\/"},"modified":"2026-02-23T01:37:27","modified_gmt":"2026-02-23T01:37:27","slug":"the-rba-is-under-extreme-pressure-to-hike-again","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/497861\/","title":{"rendered":"The RBA is under extreme pressure to hike again"},"content":{"rendered":"<p>Thursday\u2019s labour force data from the Australian Bureau of Statistics (ABS) has put the Reserve Bank of Australia (RBA) under more pressure to hike interest rates.<\/p>\n<p>Australia\u2019s headline unemployment rate remained at 4.1% in January amid solid employment growth of 17,800.<\/p>\n<p>The number of hours worked also rose by a solid 0.6% in January.<\/p>\n<p>As illustrated below by Alex Joiner, chief economist at IFM Investors, the unemployment rate is tracking well below the RBA Statement of Monetary Policy\u2019s latest forecast:<\/p>\n<p>Advertisement<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/Unemployment-vs-RBA.png\" width=\"660\" height=\"536\" alt=\"Unemployment vs RBA\"\/><\/p>\n<p>While it would be easy to dismiss the data as an aberration, the following charts from Justin Fabo at <a href=\"https:\/\/www.antipodeanmacro.com\/\" rel=\"nofollow noopener\" target=\"_blank\">Antipodean Macro<\/a> illustrate how the weight of the data points to a tightening labour market.<\/p>\n<p>First, full-time employment has trended higher for several months:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/Full-time-employment.png\" width=\"580\" height=\"477\" decoding=\"async\" loading=\"lazy\" alt=\"Full time employment\"\/><\/p>\n<p>Second, average hours worked have risen in recent months, another sign of an improving labour market:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/Hours-worked.png\" width=\"581\" height=\"475\" decoding=\"async\" loading=\"lazy\" alt=\"Average hours worked\"\/><\/p>\n<p>Third, businesses have reported rising capacity utilisation, which has been associated with the decline in the unemployment rate:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/Unemployment-vs-capacity-utilisation.png\" width=\"577\" height=\"467\" decoding=\"async\" loading=\"lazy\" alt=\"Capacity utilisation\"\/><\/p>\n<p>Fourth, Jobs &amp; Skills Australia has reported rising job vacancies, which has corresponded with the decline in the unemployment rate:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/Unemployment-vs-job-ads.png\" width=\"587\" height=\"472\" decoding=\"async\" loading=\"lazy\" alt=\"Unemployment vs job ads\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Finally, SEEK has reported a decline in the number of applicants per job, which has also been reflected in the decline in the unemployment rate:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/Unemployment-vs-job-applications.png\" width=\"575\" height=\"487\" decoding=\"async\" loading=\"lazy\" alt=\"Unemployment vs job applications\"\/><\/p>\n<p>The RBA\u2019s latest minutes stated that it\u00a0would make future rate decisions \u201cbased on incoming data\u201d, subject to \u201cpreserving as many of the gains in employment as possible\u201d.<\/p>\n<p>Advertisement<\/p>\n<p>Given that the Australian labour market has unambiguously tightened and trimmed-mean inflation remains well above the 2% to 3% target band, the RBA will be under intense pressure to tighten rates again at its next monetary policy meeting on 16-17 March.<\/p>\n<p>Indeed, the interest rate futures market has assigned a 100% likelihood that the RBA will hike again in May, with a strong likelihood of another hike by late 2026.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/RBA-rate-tracker-3.png\" width=\"660\" height=\"391\" decoding=\"async\" loading=\"lazy\" alt=\"RBA rate tracker\"\/><\/p>\n<p>Advertisement<\/p>\n<p>If true, the official cash rate would return to its post-pandemic peak of 4.10%.<\/p>\n","protected":false},"excerpt":{"rendered":"Thursday\u2019s labour force data from the Australian Bureau of Statistics (ABS) has put the Reserve Bank of Australia&hellip;\n","protected":false},"author":2,"featured_media":497862,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-497861","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/497861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=497861"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/497861\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/497862"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=497861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=497861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=497861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}