Summary:
- Australian labour market added almost 15k new jobs in September
- A drop in unemployment was offset by a corresponding decline in participation
- Aussie leads the gains in G10 as rate cut odds slightly recede
The Australian economy added 14.7k new jobs in September, a number just subtly below market expectations calling for a 15k increase. Moreover, additional jobs came solely from full-time employees (+26.2k) while part-time employment fell 11.4k. Concurrently, we were offered a surprise in the form of an unexpected drop in unemployment to 5.2% from 5.3%. However, this drop was fully offset by a corresponding decline in the labour force participation rate which ticked down to 66.1% from 66.2%. On top of that, let us notice that the latest uptick in unemployment coincided with a continued uptrend in the labour force participation rate, being a clear signal of a qualitative change in the Australian labour market (more people have been encouraged to get a job).
On the other hand, the current level of unemployment is still well above the one desired by the Reserve Bank of Australia wanting to take it down to 4.5% in order to get the tighter market and thereby exert upward pressure on wage and ultimately push inflation to the desirable area. Today’s release turned out to be a positive factor for the Aussie dollar being the strongest major currency this morning. This is a result of slightly receding odds for lower rates there by the year-end. Nevertheless, we doubt any long-lasting rebound in the Aussie in the foreseeable future.
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The pace of jobs creation in Australia has eased recently while the jobless rate has ticked higher. Source: Macrobond, XTB
