SYDNEY, Aug 20 (Reuters) – Australian employment unexpectedly fell in July and the jobless rate hit its highest since late 2021, data showed on Thursday, easing pressure on the central bank to raise interest rates.
The weak report sent the Australian dollar down 0.2% to $0.7111. Markets are still split on the chance of a fourth rate rise this year from the Reserve Bank of Australia, with much now riding on inflation outcomes.
Figures from the Australian Bureau of Statistics showed net employment fell 15,800 in July from June, when it jumped a revised 80,300. That was against forecasts for an increase of 15,000, though full-time jobs did rise by 16,300.
The jobless rate ticked up to 4.5%, above forecasts of a steady 4.4%, as the participation rate eased to 66.9%. Hours worked dropped 0.6%, while underemployment held steady at 6.4%.
The RBA judged the labour market has eased a little, a reason that it held policy rates steady at 4.35% last week after three rate hikes this year. Data showed on Wednesday that wages rose at a moderate pace for a fifth straight quarter.
Policymakers, however, did warn that further tightening cannot be ruled out if inflation risks materialise, citing the Middle East conflict, the global AI boom and poor productivity that has restrained the economy’s potential growth rate.
RBA Deputy Governor Andrew Hauser said on Wednesday the central bank needed to see more slowdown in the labour market. The RBA expected the unemployment rate to tick up to 4.5% by the year-end before peaking at 4.8% in 2028.
(Reporting by Stella Qiu and Wayne Cole; Editing by Muralikumar Anantharaman)
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