By James Glynn
SYDNEY–Australia’s job market remained ultra-tight in June, with the unemployment rate unmoved from its lowest levels in nearly 50 years despite households and businesses feeling increasing pain from soaring interest rates and record mortgage repayments.
The seasonally-adjusted unemployment rate stood at 3.5% in June, unchanged from May, with the economy adding a further 32,600 new jobs over the month, the Australian Bureau of Statistics said Thursday.
The employment-to-population ratio remained at a record-high 64.5%, while the participation rate fell 0.1 percentage point to 66.8% from its peak record in May.
The strong employment data will stoke bets for a further rise in official interest rates in August, with the Reserve Bank of Australia saying this week that any further increases would be dependent on data.
The RBA will look closely at second-quarter inflation data next week and retail sales figures to assess whether it needs to tighten the policy strings further.
The strength of hiring in June suggests that underlying demand across the economy remains solid even after a record 400 basis point of increases to the cash rate.
“The hotter-than-expected jobs numbers, which has the unemployment rate edging back towards a 50-year low…leaves no room whatsoever for an upside surprise in next Wednesday’s 2Q CPI data,” said Tony Sycamore, market analyst at IG Markets.
Such is the demand for labor, there are over 1 million more employed people than there were before the pandemic, and a much higher share of the population is employed, the ABS said.
In June 2023, 64.5% of people 15 years or older were employed, an increase of 2.1 percentage points since March 2020.
Monthly hours worked increased by 0.3% in June, which was again faster than the 0.2% growth in employment, the ABS said.
Consistent with the stronger growth in hours worked, full-time employment has increased by 380,000 people over the past year, while part-time employment rose 30,000, the ABS added.
Write to James Glynn at [email protected]; @JamesGlynnWSJ
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