Labour market to keep surprising to the upside

Australia’s unemployment rate has fallen much faster than most had anticipated. And with the share of underemployed workers nearly back at pre-virus levels, the risk of widespread job losses after the phaseout of the JobKeeper wage subsidy in March has continued to diminish. Meanwhile, the resilience of inflation in New Zealand supports our view that the RBNZ will become the first advanced economy central bank to hike interest rates next year.