On 20 June, the Australian Bureau of Statistics (ABS) released the latest jobs data for June, showing another month of strong labour market conditions. The unemployment rate remained at 3.5% as the jobs market held steady despite rapidly rising interest rates and a slowdown in consumer spending.
About 32,600 people found work in June, better than economists’ expectations for modest employment growth of 15,000. The rise in employment in June saw the employment-to-population ratio remain at a record high, reflecting a tight labour market in which employment has recently increased in line with population growth.
The ABS said, “In addition to there being over a million more employed people than before the pandemic, a much higher share of the population is employed. In June 2023, 64.5% of people 15 years or older were employed, an increase of 2.1% since March 2020.”
The participation rate fell 0.1% to 66.8% from last month’s record high. It fell 0.2% for women, to 62.5%, and rose 0.1% to 71.3% for men.
The Reserve Bank of Australia (RBA) expects the jobless rate to drift higher to 4.5% by mid-2025 due to the dampening effect of 12 interest rate rises. But the strength in jobs means another rate rise is likely when the RBA next meets in August. This is likely to put further upward pressure on the AUD. Although currencies are notoriously difficult to predict, for a number of reasons, we expect the AUD to drift higher over coming months.
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