Australia’s unemployment rate improved in July, edging lower to 4.2 per cent from 4.3 per cent in June, according to the latest figures from the Bureau of Statistics.
Employment increased by nearly 25,000 people, driven by 60,000 full-time jobs, and the number of unemployed people also fell in the month.
The ABS noted that female workforce participation hit a record high last month, as the number of full-time female workers grew by 40,000.
The overall participation rate, which is the proportion of people in work or looking for a job, remained steady at 67 per cent.
On Tuesday, the Reserve Bank maintained its forecast for the unemployment rate to sit at 4.3 per cent in December this year.
Jobs data should keep ‘RBA on sidelines’ in September
The Australian dollar rose to two-week highs following the data release, as the improvement in the jobs market saw expectations of an interest rate cut in September pared back.
Economists and traders are betting on a further reduction in rates by the RBA this year, with November considered the most likely timing, after this week’s 0.25 percentage point cut took the cash rate to 3.6 per cent.
“The tick down in the unemployment rate in July is likely to keep the RBA on sidelines at its next meeting in September, but we still think the bank will ultimately loosen policy a bit further than most expect,” Capital Economics senior economist Abhijit Surya said.
“However, if we’re right that the labour market will loosen again over the coming months, while activity and inflation remain subdued, the bank should have few concerns about resuming its easing cycle in November.”