Australia’s job market continues to show resilience despite mounting economic pressures. The unemployment rate remained unchanged in June, holding steady at its lowest point in almost five decades. This is despite the growing financial strain on households and businesses due to rising interest rates and record-high mortgage repayments.
According to the Australian Bureau of Statistics, the seasonally-adjusted unemployment rate remained at 3.5% in June, the same as the previous month. Over the course of June, the economy added an impressive 32,600 new jobs.
One notable figure is the employment-to-population ratio, which reached a record-high of 64.5%. However, the participation rate experienced a slight decline of 0.1 percentage point from its peak in May, standing at 66.8% in June.
These robust employment figures are likely to fuel speculation about a potential increase in official interest rates in August. The Reserve Bank of Australia stated this week that any further rate hikes would depend on incoming data. The central bank will closely monitor second-quarter inflation data and retail sales figures to determine if additional policy measures are necessary.
Despite the already substantial 400 basis point increase in the cash rate, the strong hiring activity observed in June suggests that underlying demand throughout the economy remains solid.
“The jobs numbers exceeded expectations and brought the unemployment rate closer to a 50-year low. This leaves no room for an unexpected surge in second-quarter CPI data,” commented Tony Sycamore, market analyst at IG Markets.
The demand for labor is evident in the fact that there are now over one million more employed individuals compared to pre-pandemic levels. Additionally, a higher proportion of the population is now employed, marking a significant increase of 2.1 percentage points since March 2020.
In terms of working hours, there was a modest increase of 0.3% in June, outpacing the 0.2% growth in employment. Full-time employment saw substantial growth over the past year, with an additional 380,000 people joining the workforce. Part-time employment also experienced a smaller increase of 30,000, according to the ABS.
The current state of Australia’s job market demonstrates strong resilience and suggests a positive outlook, despite the economic challenges faced by households and businesses alike.