SYDNEY, Oct 21 Reuters Australia39;s central bank has been surprised by the strength of employment growth, a top official said on Monday, adding policymakers remained ready to respond to changes in economic outlook in either direction.

In a speech in Sydney, Reserve Bank of Australia Deputy Governor Andrew Hauser said there were a number of interpretations on the strong labour market. It could be because demand conditions are a bit too strong or the supply side of the economy is relatively weak, he said.

Australian employment beat forecasts for a sixth straight month in September, while the jobless rate held steady at 4.1, reinforcing the view that the labour market remains tight and dimming market bets on nearterm rate cuts.

We39;re data dependent, but we39;re not data obsessed, Hauser said at a Commonwealth Bank of Australia conference. So we have to take that number in the context of everything else.

We will obviously react to it because that data outturn affects our view about the outlook, but it is the implication of the data for the outlook, not the data itself, that should be most relevant to policy.

The economy has slowed to a crawl in the face of high interest rates, but underlying inflation has been sticky with the labour market only easing at a gradual pace, leaving markets implying just a 26 probability of a rate cut in December.

Swaps imply a first rate cut is only fully priced in for April next year.

We are acutely conscious that the outlook is…