SYDNEY (Reuters) - Economists at National Australia Bank <NAB.AX> on Wednesday pushed out their call for the next central bank rate cut to February from December and highlighted the possibility of unconventional policies.
NAB now expects a 25 basis point cut to 0.5% early next year though it still considers an easing in December as the "best course of action."
The Reserve Bank of Australia (RBA) has cut its benchmark rate three times since June to a record low 0.75% to revive growth and inflation. While it has said it was prepared to move again if needed, policymakers have indicated they were on wait-and-watch mode for now.
NAB's change brings it in line with other major Australian banks - Commonwealth Bank, ANZ and Westpac - who have been predicting a cut in February.
"We see an improvement in growth over time but not to a sufficiently strong rate...to prevent the unemployment rate (from) beginning to rise," NAB chief economist Alan Oster wrote in a note.
Australia's labour market is seeing a surge in jobs but as more people look for work unemployment has ticked higher to 5.2% in September from 4.9% at the start of this year. The RBA has said the jobless rate needs to be at or below 4.5% to generate any wage or inflation pressures.
Employment data for October is due at 0030 GMT Thursday with economists polled by Reuters expecting the jobless rate to rise to 5.3%.
"At the same time, the government does not seem to be inclined to provide material fiscal stimulus in the near term, which increases the need for the RBA to ease further, including a further rate cut and unconventional policy, should our forecast of a deteriorating labour market materialise," Oster said.
Data released on Wednesday showed third quarter wage growth was surprisingly weak while consumers remained gloomy in November.
Australia's A$1.95 trillion economy is expanding at its slowest pace in a decade having dodged a recession since the early 1990s. Sluggish household consumption, lukewarm inflation and rising unemployment in recent months forced the RBA's hand three times this year though markets expect more.
Rates futures <0#YIB:> imply a more than 70% chance of a cut to 0.5% by June next year.
(Reporting by Swati Pandey; Editing by Sam Holmes)
