Australia’s official unemployment rate has increased, with the economy shedding 14,600 jobs in July. But that could be good news for one group of Aussies.
Data released today by the Australian Bureau of Statistics (ABS) found the unemployment rate increased by 0.2 per cent to 3.7 per cent last month, with the number of unemployed people increasing by 36,000.
This is higher than economists had predicted, with most forecasting a smaller rise to 3.6 per cent, after it remained steady at 3.5 per cent in June.
“The fall in employment follows an average monthly increase of around 42,000 people during the first half of this year. Employment is still around 387,000 people higher than last July,” ABS head of labour statistics Bjorn Jarvis said.
Jarvis said the July data included the school holidays and people taking leave or starting or leaving a job.
“It’s important to consider this when looking at month-to-month changes, compared with the usual seasonal pattern. The only other fall in employment in 2023 was in April, which also included school holidays,” Jarvis said.
“While unemployment increased by 36,000 people in July, to 541,000, it was still around 172,000 lower than before the pandemic.”
RBA could keep rates on pause
The increased unemployment rate could be good news for home loan borrowers, because it could give the Reserve Bank of Australia (RBA) more reason to keep interest rates on hold.
“Long regarded as a lagging indicator, but careful not to overplay a single data point, the weaker-than-expected July employment report vindicates the RBA’s more cautious stance on monetary policy and, combined with soft online prices, further solidifies the view that the hiking cycle is at an end,” State Street Global Markets head of APAC Macro Strategy, Dr Dwyfor Evans, said.
The RBA kept the cash rate steady at 4.1 per cent this month, and predicted the unemployment rate would increase to 4.5 per cent by late 2024.