RBA official sees labor market easing faster than forecast

SYDNEY, Oct 19 (Reuters) - A senior Australian central banker flagged on Monday signs that the labour market was loosening faster than expected, but cautioned against reading too much into a month of data. Christopher Kent, assistant governor of the Reserve Bank of Australia, said markets had trimmed the probability of another hike in interest rates after data last week showed unemployment unexpectedly hit a five-year high of 4.7% in September. Kent, who heads the RBA's financial markets unit, said at a banking conference that a key question facing policymakers was whether the loosening in the labour market was due to weakening demand or fast-rising labour costs. He added that quarterly inflation data due next week would help to answer the question. The resilience in the labour market is one reason the RBA raised interest rates four times this year to 4.6% to fight inflation, but the underlying measure stayed stubborn at 3.6% for three straight months and risks are still tilted to the upside. Markets imply a 30% probability that the RBA will lift rates at its next policy meeting on November 2 and 3, but a move by December is about 50% priced in.