Australia’s unemployment rate has increased above expectations as the nation’s economy cools, further improving the case for the RBA to keep interest rates steady.
New data from the Australian Bureau of Statistics (ABS) showed that in July, the unemployment rate increased by 0.2 percentage points to 3.7 per cent.
The data outstripped the expectations of financial markets, which largely priced in a smaller rise to 3.6 per cent.
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The number of employed Australians dropped by 15,000, while the number of Australians classified as being unemployed rose by 42,000.
ABS head of labour statistics Bjorn Jarvis said the job rate was still below pre-pandemic levels.
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“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,” he said.
“July includes the school holidays, and we continue to see some changes around when people take their leave and start or leave 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.
“While unemployment increased by 36,000 people in July, to 541,000, it was still around 172,000 lower than before the pandemic.”
Today’s data lends more weight to the case that the RBA should hold interest rates steady, which has long signalled that unemployment would likely increase as inflation cools.
