Australia’s unemployment rate increased to 4.5% in July from 4.4% in June, exceeding the 4.4% forecast and signaling a softening labor market. Employment declined by 15,800 jobs last month, missing expectations for an 11,700 rise and reversing most of the 76,300 gain recorded in June.
Full-time employment rose by 16,300 in July, a slowdown from the 29,300 increase posted in June. The participation rate held steady at 66.9%, slightly below June’s 67%. The data suggests the labor market is loosening in line with the Reserve Bank of Australia’s updated projections.
Prior to the release, markets had priced in roughly 4 basis points of tightening for the September RBA meeting and about 15 basis points of rate hikes by year-end. The Australian dollar weakened modestly following the report, with the AUD/USD pair down around 0.2%.
Analysts noted that a softer-than-expected labor market reading—particularly a rise in the jobless rate toward 4.6%—could reinforce expectations for the RBA to maintain its current policy stance through year-end. The central bank has previously projected unemployment to reach 4.5% by the end of 2026.
