The Australian jobs report has been released and AUD/USD has dropped 20 pips. Jobs growth has beaten consensus in 4 of the past 5 months, including a steep 41k gain in July but today’s was a slight disappointment in that it was lower than the prior and still not strong enough to avert a potential rate cut from the Reserve Bank of Australia – potentially by November
- Participation Rate came in at 66.2%, higher that 66.1% expected and prior (bullish, but assisting unemployment rate)
- The Unemployment Rate came in at 5.3% (bearish).
- Employment Change was in at 34.7K vs 10.0K expected but below 41.1K prior.
About the Unemployment Rate
The Unemployment Rate released by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, it indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. A decrease of the figure is seen as positive (or bullish) for the AUD, while an increase is seen as negative (or bearish).
National Bank of Australia comment on Aussie economy
“We have changed our call on monetary policy. Previously we expected a cut in November to 0.75%, together with additional fiscal stimulus. We now expect a further cut to 0.5% in February, at which point the Reserve Bank would outline its plans on unconventional policy. Unless the government delivers a meaningful fiscal stimulus, a further cut to 0.25% by mid-2020 is likely, along with the adoption of non-conventional monetary policy measures.”