Australian markets close modestly lower after RBA Governor's remarks on employment

Australian markets ended modestly lower after Reserve Bank of Australia Assistant Governor Sarah Hunter said the labor market is still tight relative to full employment.

The benchmark S&P/ASX 200 slipped 0.30 percent to 7,987.90, with banks and energy stocks leading losses. The broader All Ordinaries index settled 0.27 percent lower at 8,195.20.

Reserve Bank of Australia Assistant Governor Sarah Hunter said the labor market is still tight relative to full employment.

"We expect the demand for labour to grow at a slower pace relative to the supply of labour in the coming quarters, gradually bringing the labour market into better balance," Hunter said at an economic forum in Sydney.

Hunter said there is space for vacancies to fall further without a sharp increase in the unemployment rate.

The bank expects employment to continue to rise but at a slower pace than population growth.

Measures of underutilization, including the jobless rate are forecast to continue rising gradually before stabilizing as the pace of growth in GDP picks up to be broadly consistent with the economy's underlying trend pace of growth, she said.

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