We learnt this week that the Australian labour market remained on solid ground in October, having loosened very little since the start of the year. The data will only reinforce the RBA's view that employment is still above its maximum sustainable level. To be sure, the resilience of the jobs market has not prevented wage pressures from easing noticeably. However, given the dismal state of labour productivity, wage growth will remain inconsistent with the RBA's 2-3% target in the near term. As a result, we're pushing back our forecast for the Bank's first rate cut from February to May.
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