SYDNEY (Reuters) – Australian employment unexpectedly fell in August as full-time positions dropped back after a sharp rise in the previous month, while the jobless rate held steady in a sign the labour market was slowly softening.
The Australian dollar slipped 0.2% to $0.6637, while three-year bond futures rallied 3 ticks to 96.6.
The mixed report failed to move the dial on the policy outlook as investors upheld bets that the Reserve Bank of Australia would likely skip a move in interest rates this month, with a cut in November about 75% priced.
Figures from the Australian Bureau of Statistics on Thursday showed net employment fell by 5,400 in August from July, when it rose a revised 26,500. That was far below market forecasts of a 21,500 gain, while full-time jobs dropped 40,900.
Annual jobs growth has slowed to 1.5%, from 3.5% in January. Hours worked dipped 0.4%, to reverse a gain in July.
The jobless rate stayed at 4.2%, as expected, which is still low by historical standards, while the participation rate ticked down to 66.8%.
“Employment growth is running out of steam, with headcount little changed from four months ago,” said Sean Langcake, head of Macroeconomic Forecasting for Oxford Economics Australia.
“We don’t think these data are bad enough to spur the RBA into action this month. But another cut in November is expected.”
The RBA has so far adopted a gradual and cautious approach to policy easing, having cut in February, May and August after assessing inflation data for the quarter. With inflation back in the target band of 2-3%, the focus is now on the labour market, which has held up surprisingly well.
The central bank had expected the unemployment rate to edge up to around 4.3% this quarter, and stay there for the foreseeable future.
Leading indicators of labour demand have been solid with job ads steadying above pre-pandemic levels. Business surveys are generally upbeat and consumer spending has picked up in the last couple of months as lower borrowing costs and past tax cuts feed through to incomes.
Sarah Hunter, an assistant governor at the RBA, said on Tuesday the central bank was close to achieving both of its inflation and employment mandates, although there are risks to both sides of its economic outlook.
ANZ, one of the big four Australian banks, said this month it would cut nearly 3,500 jobs over the next year as part of a major restructuring, while National Australia Bank would shed 410 jobs and move some of those overseas.
(Reporting by Stella Qiu and Wayne Cole; Editing by Jacqueline Wong and Sam Holmes)
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