Senior economist Callam Pickering said the jobs market data suggested the Reserve should cut rates next month.
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“Based on recent soft labour market data, the RBA needs to cut rates further to provide sufficient support to households and businesses, while ensuring that the unemployment rate remains low and we avoid recession,” he said.
“Cutting rates again isn’t without its risks, but the risks of keeping them too high appear more damaging right now.”
The figures were released on the same day the Westpac-Melbourne Institute’s measure of consumer confidence fell by 3.5 per cent in October to be down by 6.5 per cent over the past two months.
Westpac’s head of macro-forecasting, Matthew Hassan, said the sharp fall in consumer optimism was largely due to the concerns about inflation and what it may mean for the future direction of interest rates.
Despite the concerns over rates, the same survey showed consumers increasingly bullish about house prices. Expectations that property prices will continue to rise hit a 15-year high in October with more than 75 per cent of those surveyed believing values will lift.
AMP economist My Bui said while consumer confidence had lifted over the past year, many consumers were still downbeat.
“Sentiment has been negative for more than three-and-a-half years and consumers are likely still price conscious in the current climate, which underpins our outlook that growth remains below long-term trend and underlying inflation stays around the 2.5 per cent target,” she said.
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