By Ambar Warrick
Investing.com-- Australia added a slightly lower-than-expected number of jobs in August, while unemployment also rose as languid wage growth weighed on an otherwise robust jobs market.
Overall participation in the job market rose to 66.6% of the population, indicating that an abundance of jobs was bound to keep unemployment low in the near-term. Despite rising in August, unemployment is still around 48-year lows.
The participation rate was also well above COVID-era levels, indicating that the jobs sector has now moved past headwinds from the virus. Australia’s economy rebounded sharply after the country withdrew most COVID-related restrictions this year.
But a lack of growth in wages appeared to be the biggest headwind faced by the jobs market. Wages grew at an annual rate of 2.6% in July, well below consumer price inflation of 6.1%. The latter is also trending around 20-year highs.
Strength in Australia’s jobs market has been a key driver of economic growth this year, by encouraging robust household spending. Optimism over the jobs market also saw Australian consumer sentiment improve slightly in early-September.
But rising interest rates and elevated inflation levels kept consumer sentiment pinned near pandemic-era lows.
The Australian dollar rose slightly after Thursday’s reading. But fears of rising U.S. interest rates and a potential economic slowdown in China meant the currency stuck to a tight trading range seen in recent months.