The Aussie dollar slumped on the latest jobs data. 4:3 <\/p>\n
The Australian dollar has slumped and the money markets are calling a 98 per cent chance of a rate cut after new data revealed a shock fall in the employment rate.<\/p>\n
The unemployment rate rose to 4.3 per cent last month, beating market expectations of 4.1 per cent, according to the Australian Bureau of Statistics.<\/p>\n
Employment as a whole rose by 2000 people this month, following a fall of 1000 in May, and is up 2 per cent year on year.<\/p>\n
The rise in unemployment was determined as 33,600 workers became unemployed in June.<\/p>\n
This was against expectations of 20,000 jobs to be added in the month and the unemployment rate to hold.<\/p>\n
Markets immediately jumped on the news, with investors now banking on a future rate cut.<\/p>\n
With expectations of lower rates, the Australian dollar slumped back below 65 US cents, while Australia\u2019s sharemarket jumped on the news.<\/p>\n
Australia’s dollar slumped after the jobs announcement. Picture: Supplied. <\/p>\n
AMP economist My Bui told NewsWire said fall in the Australian dollar follows the market pricing in a more definite rate cut by the RBA.<\/p>\n
\u201cThe futures market pricing for the August meeting is calling a 98 per cent chance of a rate cut,\u201d she said.<\/p>\n
\u201cWe continue to see the jobs market as being weaker than the (figures suggests).<\/p>\n
\u201cYes the unemployment rate seems quite low but this month we\u2019ve seen weakening in multiple measures, including leading indicators in the job market which I think the RBA will pay attention to.\u201d<\/p>\n
Ms Bui said Thursday\u2019s numbers only add to the argument for more mortgage relief in the current cycle.<\/p>\n
\u201cWe still see four more rate cuts in the cycle which hasn\u2019t changed with today\u2019s unemployment data but today\u2019s data adds another strong argument for the RBA to move so I think it\u2019s quite justified that the markets should move with the heightened probability of a rate move,\u201d she said.<\/p>\n
IG market analyst Tony Sycamore said the bond market was quick to react to Thursday\u2019s data, moving up expectations of a rate cut from 80 to nearly 100 per cent in August.<\/p>\n
\u201cToday\u2019s rise in the unemployment rate pushes it above the RBA\u2019s forecast of 4.2 per cent for June 2025 and meets the 4.3 per cent rate the RBA expected by year-end,\u201d he said.<\/p>\n
\u201cCombined with last month\u2019s fall in employment, there are clear signs of deceleration emerging in the labour market.<\/p>\n
\u201cThis calls into question the RBA\u2019s decision to prioritise inflation over growth and jobs at its board meeting earlier this month.\u201d<\/p>\n
RBA is expected to cut interest rates after Thursday\u2019s release of June job figures. Picture: NewsWire \/ John Appleyard <\/p>\n
Betashare chief economist David Bassanese, who called a hold in July, said Thursday\u2019s unemployment data was a \u201cslam dunk\u201d for an August rate cut.<\/p>\n
\u201cWe\u2019ll need more consistent signs of weakness in both employment and hiring indicators before we can conclude the labour market is turning,\u201d he wrote in an economic note.<\/p>\n
Story Continues <\/p>\n
\u201cThat said, today\u2019s result clearly adds to the case for a RBA rate cut at the August policy meeting provided next week\u2019s Q2 CPI report is not a shocker.\u201d<\/p>\n
With the unemployment rate lurching higher, growth at subpar levels, and inflation back within the RBA\u2019s target band, the RBA will no doubt be keen to make amends at its meeting in August.<\/p>\n
Despite Thursday\u2019s rising unemployment Treasurer Jim Chalmers said Australia\u2019s unemployment remains historically low while the participation rate remains near record highs.<\/p>\n
\u201cThe ongoing resilience in our labour market over the past three years remains one of our best defences against the volatile global economic conditions we face, which is a big focus of my discussions here at the G20,\u201d Mr Chalmers said from the G20 finance ministers meeting in South Africa.<\/p>\n
\u201cThe Australian economy is not immune from global uncertainty but we are well\u2011placed and well\u2011prepared to face the challenges ahead.\u201d<\/p>\n
The underemployment rate also increased to 6 per cent, as 40,200 part-time roles were created and 38,200 full-time roles were lost from the job market.<\/p>\n
Australia\u2019s unemployment rate unexpectedly rose in June. Picture: NewsWire \/ David Geraghty <\/p>\n
The employment-to-population ratio remained at 64.2 per cent, and the participation rate, being people who are actively working, rose to 67.1 per cent.<\/p>\n
Hours worked fell 0.9 per cent in June, following a rise of 1.4 per cent in May.<\/p>\n
\u201cThis month we saw a decrease in full-time hours worked, down 1.3 per cent, associated with a 0.4 per cent fall in full-time employees,\u201d ABS head of labour statistics Sean Crick said.<\/p>\n
Prior to Thursday\u2019s figures, experts had tipped the unemployment rate to remain at 4.1 per cent, although they did predict a tightening of the jobs market.<\/p>\n
The Reserve Bank of Australia will be watching the jobless rate ahead of its next meeting on August 11-12, having the dual mandate of returning to full employment and controlling inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"The Aussie dollar slumped on the latest jobs data. 4:3 The Australian dollar has slumped and the money…\n","protected":false},"author":2,"featured_media":141,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,169,166,99,164,167,168,170,165],"class_list":["post-140","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-australian-bureau-of-statistics","tag-australian-dollar","tag-business","tag-economy","tag-employment-rate","tag-job-market","tag-market-expectations","tag-unemployment-rate"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=140"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/140\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/141"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}