The unemployment rate in Australia has unexpectedly increased, marking the first rise this year, which may enhance the prospect of interest rate cuts in the upcoming month following the Reserve Bank of Australia’s (RBA) recent decision to maintain the current rate. According to figures published by the Australian Bureau of Statistics, the jobless rate climbed to 4.3% in June, the highest level since late 2021, up from 4.1% that had been consistent since January.
Economists had anticipated that the unemployment rate would remain stable for a sixth consecutive month. This rise in unemployment coincided with the loss of approximately 38,000 full-time jobs last month, although there was a gain of 40,000 part-time positions. Sean Crick, head of labour statistics at the ABS, noted that the increase in unemployment was attributed to a net rise of 34,000 unemployed individuals, alongside a 1.3% reduction in full-time hours worked and a 0.4% drop in the number of full-time employees.
For the RBA, the historically low unemployment rate has been a significant factor in their hesitance to lower interest rates over the previous year. This latest data emerges just a week after the central bank chose to keep the cash rate unchanged, defying widespread expectations. RBA Governor Michele Bullock indicated that the decision to maintain rates was partly about awaiting further data before making any adjustments. The RBA board’s next meeting is scheduled for August 12, when a new interest rate decision will be revealed.
Financial markets had suggested a high probability—91%—of a possible interest rate cut next month prior to the release of the latest job figures. Bullock highlighted that the board’s recent decision was influenced by differing opinions within the group regarding timing, rather than direction. She emphasised that discussions were centred around ensuring adequate time for assessment ahead of the next meeting.