Don't forget that the prior labour market weakness conspired to drive wages growth to a rate never before seen in Australia. The recent public sector wages claims suggests wages will fall further in 2015 which is dreadful news for consumer spending, confidence, growth and jobs. Deflationary pressures are not nice for an economy.
Today's labour force data, taken with the recent news on consumer sentiment, business confidence, commodity prices, building approvals, government demand and household consumption are screaming for an interest rate cut or two or three or four.
Lower interest rates are increasingly being locked in for early 2015 and it seems that more than 50 basis points of rate cuts from the current 2.5 per cent will be needed before we see the unemployment rate anywhere near where it should be – at 5 per cent or less.