The unemployment rate has unexpectedly risen for the first time this year, boosting the chances of interest rate relief next month after the RBA’s surprise hold last week.
New data released by the Australian Bureau of Statistics this morning revealed the jobless rate increased to 4.3 per cent in June, the highest it’s been since late 2021, and up on the 4.1 per cent it had sat at since January.
Economists had widely expected the figure to remain steady for what would have been the sixth consecutive month.
The rise came as about 38,000 people were out of full-time work last month, although 40,000 gained a part-time job.
“This month we saw the unemployment rate rise 0.2 percentage points, driven by a 34,000 increase in the number of unemployed people,” ABS head of labour statistics Sean Crick said.
“This month we saw a decrease in full-time hours worked, down 1.3 per cent, associated with a 0.4 per cent fall in full-time employees.”
Persistently low unemployment has been one of the driving factors behind the RBA’s caution in reducing interest rates over the past year, and the new data comes just a week after the central bank defied expectations by keeping the cash rate on hold.
Governor Michele Bullock and her monetary policy board will hold their next meeting in four weeks, with an interest rate decision to be handed down on August 12.
Bullock indicated last week that the call to keep rates on hold – which was a split, 6-3 decision – wasn’t a case of the RBA saying there won’t be further cuts, but that the board wanted fresh data before pulling the trigger on more relief.
“The board’s decision today was recognising that, look, there’s a few weeks, five weeks, until the next meeting… the difference in opinion amongst the board wasn’t so much directionally, it was about timing,” she said last Tuesday.
Prior to the release of the jobs data today, financial markets had been pricing in a 91 per cent chance of a cut next month.
