Australia’s unemployment rate increased to 4.5% in July, up from 4.4% in June and above the 4.4% forecast, as hiring unexpectedly declined by 15,800 jobs. The drop follows a revised gain of 76,300 jobs in June, reversing much of the prior month’s momentum.
Full-time employment rose by 16,300 in July, a sharp deceleration from the 29,300 increase recorded in June. The labor force participation rate held steady at 66.9%, slightly below June’s 67.0%. The data, released by the Australian Bureau of Statistics, points to a gradual loosening in the labor market.
Markets had priced in roughly 4 basis points of policy tightening for the Reserve Bank of Australia’s September meeting and about 15 basis points of hikes by year-end. The AUD/USD currency pair weakened by about 0.2% following the report.
The RBA’s latest projections anticipate the unemployment rate rising to 4.5% by the end of 2026. IG Senior Markets Analyst Tony Sycamore noted that a softer-than-expected labor market reading, particularly if the jobless rate approaches 4.6%, could reinforce expectations that the RBA will maintain its current policy stance through year-end.
