Economist at UOB Group Lee Sue Ann gave her view on the recent publication of the Australian labour market report.
“Australia’s employment surged past expectations in July, despite worries of an economic slowdown. Overall job creation came in at an impressive 41,100, well above the 14,000 markets were expecting. Full-time employment rose by 34,500 whilst part time positions were up by 6,700. However, the unemployment rate was stubbornly stuck at 5.2% as more people went looking for work. The participation rate “” the proportion of the adult population in work or actively looking for a job “” rose to a record 66.1%”.
“Earlier this month, the Reserve Bank of Australia (RBA) kept its official cash rate (OCR) on hold at 1.00%, as expected. The RBA has singled out the labour market as key for whether it needs to cut rates again. Today’s strong rise in employment data for July suggests that the RBA can afford to be a little bit more patient at this juncture”.
“We do acknowledge, though, that risks remain tilted to the downside, and easing pressure by other central banks may push the RBA into another rate cut. On the domestic front, the RBA has set a goal of reaching a jobless rate of 4.5% “” a tough mark, given that the jobless rate has been stuck above 5.0% since bottoming at 4.9% in February”.