Australian Unemployment Drops to 4.2% as Full-Time Roles Surge
Australian employment rose and the jobless rate ticked lower, signaling the labor market remains tight and reinforcing the Reserve Bank’s cautious approach to policy easing.
The jobless rate fell to 4.2% in July, from a four-year high of 4.3% the prior month, matching economists’ forecasts, data from the Australian Bureau of Statistics showed Thursday. Employment rose by 24,500 driven entirely by full-time roles.
The Australian dollar and yields on policy-sensitive three-year government bonds edged up. Traders currently reckon the RBA’s September decision is about a one-in-three chance, with a fourth rate cut this year seen as more likely to come in November.
Jobs data is crucial for the RBA’s rate-setting board as the resilience of the labor market, and worries about it rekindling price pressures, have been among factors driving a cautious approach in the current easing cycle. The central bank has lowered borrowing costs three times since the start of the year for a cash rate of 3.6%.
On Tuesday, Governor Michele Bullock signaled a “couple more” cuts will be required to achieve the RBA’s latest forecasts. The employment report follows data on Wednesday that showed Australia’s wages growth remained elevated last quarter, advancing 3.4% from a year ago.
Source : Bloomberg
