Australia July employment jumps past forecasts, unemployment at 2-1/2 high
2024.08.14 22:35
By Stella Qiu
SYDNEY (Reuters) -Australian employment sped past forecasts for a second straight month in July, yet the jobless rate still ticked higher as worker participation hit record peaks in a sign labour demand remains solid despite high borrowing costs.
Markets pared back the chance for an interest rate cut this year, with the probability of a November easing now seen at 35%, down from 55% before the release. The local dollar perked up 0.2% to $0.6609 while three-year bond futures trimmed earlier gains to be flat at 96.51.
Figures from the Australian Bureau of Statistics on Thursday showed net employment rose 58,200 in July from June, when they jumped 52,200. That was well above market forecasts for a 20,000 rise.
Full-time employment surged 60,500, for a third month of strong gains.
The jobless rate, however, ticked up to 4.2%, the highest since early 2022 and above forecasts of 4.1% as more people looked for work. The participation rate rose to an all-time high of 67.1%, while hours worked rose 0.4%.
“The employment and participation measures remain historically high while unemployment and underemployment measures remain historically low, compared with what we saw before the pandemic,” said Kate Lamb, ABS head of labour statistics.
“This suggests the labour market remains quite tight.”
The Reserve Bank of Australia has held its policy steady since November, judging the current cash rate of 4.35% – up from the 0.1% during the pandemic – is restrictive enough to bring inflation to its target band of 2-3% while preserving employment gains.
However, it assessed that the labour market was still running a little tight, one reason that underlying inflation, which was at 3.9% last quarter, is only expected to return to the target band by the end of 2025.
