Economists will turn their attention to Australian jobs figures this week but the focus will still largely remain on developments in the Middle East.
March labour force figures, set to be released on Thursday, will effectively be the first batch of top tier domestic data to overlap with the Iran war.
But given the unemployment rate and hiring tend to be lagging economic indicators, it will likely be too early to see the full impact of the supply shock reflected in the data, said National Australia Bank economists Jessie Cameron and Josh Copeland.
NAB predicts the unemployment rate to remain at a relatively low 4.3 per cent, with an extra 25,000 jobs expected to be added to the economy.
While the Reserve Bank still believes the labour market is on the tighter side, an unemployment rate at 4.3 per cent would ease some concerns the jobs market is re-tightening, the NAB economists said in a research note.
As the labour market was in decent shape heading into the war, it gives the central bank more leeway to raise interest rates and tackle inflation before having to worry about threatening the full employment side of its dual mandate.
"For the RBA ...
the immediate focus is on the local inflation outlook and risks around inflation expectations," said Westpac economist Ryan Wells.
Ultimately, the biggest influence on inflation now is what happens to the Strait of Hormuz and how quickly that is passed through to Australian consumer prices.
The announcement last week that the Strait would open for two weeks during a ceasefire was welcome, said Westpac chief economist Luci Ellis.
But Iran shutting the vital supply route less than 24 hours later....
