Thứ Sáu, Tháng Sáu 9, 2023
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Australia’s unemployment rate escalates, reducing pressure on interest rate hikes


(Bloomberg) – Australia’s unemployment rate unexpectedly rose in April as employers cut jobs – led by full-time jobs – further reinforcing the possibility that the Reserve Bank will back the election. policy meeting next month.


Thursday’s data showed currencies and government bond yields falling as the unemployment rate rose to 3.7% from a near 50-year low of 3.5%. The economy eliminated 4,300 positions after two bumper months of hiring, compared with a forecast increase of 25,000,


Weaker results after relatively limited wage increases suggest that the RBA’s 11 rate hikes over the past year are weighing heavily on the corporate sector at a time when increased migration is also set to boost the workforce. . That strengthens the argument for the bank to keep the cash rate at 3.85% on June 6.

“We were expecting a softer result today, largely due to the payback for oversized and strong prints,” said Su-Lin Ong, chief economist at Royal Bank of Canada. strong recently. “I’m not sure this relaxes the RBA as much on the labor market, wages and inflation, but it might give them a little more space to gauge more upcoming data.”


Employment is a key piece of the policy puzzle for Governor Philip Lowe as he tries to gauge the economic impact of the RBA’s aggressive tightening so far. Lowe wants to maintain the job gains gained since the pandemic while bringing inflation back to its 2-3% target from 7% today.

Mr Ong said Australia’s job market remained “healthy and tight” with key trends figures – unemployment rate, participation rate and underemployment rate – all strong on the calendar history, “although it may be past the rarest and the best”.

The governor said the board will closely monitor the economic and inflation figures when deciding on next policy moves. This month’s figures paint a mixed picture with the business sector still resilient but households showing signs of a squeeze.


Goldman Sachs Group Inc. expected the bank to raise rates by a quarter of a percentage point while many others, including the Commonwealth Bank of Australia, said the RBA’s tightening cycle was over. Overnight indexed swaps also imply that the final rate has been reached.

What Bloomberg Economics Says…

“The labor market results add weight to our forecast for a further RBA pause in June. Looking further ahead, we expect the RBA to reverse course and cut rates in Q4 2023 amid higher unemployment.”

— James McIntyre, economist

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Employment strength is a key factor in the RBA’s belief that a recession can be avoided. The central bank forecasts the unemployment rate will rise to 4% by year-end as higher borrowing costs drag on economic activity.

Bloomberg Economics estimates that job growth will need to average 2.3% a year, or more than 29,000 jobs per month, to prevent further increases in unemployment — a difficult requirement at a time of economic economy is expected to slow down.

Thursday’s jobs report also showed:

  • Participation rate dropped to 66.7% from an upward adjusted 66.8% in March
  • Underemployment rate fell to 6.1% and underutilization rate increased to 9.8%
  • Full-time jobs decreased by 27,100, while part-time jobs increased by 22,800
  • The employment-to-population ratio fell to 64.2%.

—With support from Tomoko Sato.

(More comments from economists.)

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