Quick Bites | Australian Labour Market Stays Strong

The labour market data released on 17 October 2024 was stronger than expected, giving a lift to the AUD and to bond market yields. It remains to be seen whether these moves are sustained, but the data probably implies that the Reserve Bank of Australia (RBA) will be in no rush to cut rates before year-end.

September’s Labour Force Survey for Employment saw employment growth accelerating to 64.1k and the unemployment rate declining to 4.1%. The details were also firm, with full-time employment rising 51.6k in the month and the participating rate rising 0.10% to a new all-time high 67.2%. Growth in labour supply remains very firm in Australia, reflecting strong population growth and increased incentives to seek work given cost-of-living pressures.   

Participation Rate Continues to Rise

Source: Goldman Sachs

Looking forward, we expect Australia’s labour market to gradually soften, perhaps rising to 4.3% by the end of 2024 before rising to 4.5 or 4.6% by the middle of next year. It now seems less likely that the RBA will commence cutting rates before February next year, but that could change with further weak data emerging in the next month or so.   

Separate data from the quarterly Labour Accounts highlight weak job creation in the private sector, but resilient growth in the public sector.

Source: Goldman Sachs