The continued resilience of the labour market in Australia is the main reason why the Reserve Bank of Australia (RBA) has become less inclined to cut interest rates again. Jobs growth remained strong in July and, notwithstanding what looks like a temporary rise to 6.3% from 6.1% in June, the unemployment rate has not risen as the RBA had expected. In contrast, the recent weakening in economic activity in New Zealand is already taking a toll on its labour market, which means the Reserve Bank of New Zealand has a lot more work to do.
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