The Reserve Bank may have left the cash rate on hold yesterday when the board met, but one economist believes there are still more cuts to come.
ANZ chief economist Ivan Colhoun said the bank continues to expect the next move in interest rates will be a further cut, driven by a likely continuing rise in unemployment as signalled by the declining trend in job advertising.
“Historically, interest rates have not risen until some months after there have been three successive monthly increases in job ads,” he said.
“Rising official interest rates in Australia appears to remain a distant prospect at this point in time.”
Mr Colhoun’s comments come as ANZ revealed there had been a drop in job advertisements for the third consecutive month in May.
According to the bank’s Job Advertisement Series, advertisements declined by 2.4 per cent after falling by 1.7 per cent in April.
Advertisements are now 28 per cent below their most recent peak, at the end of 2010.