Australia hiring spree pushes jobless rate to lowest since 1974
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AUSTRALIAN employers added more jobs in June than expected, sending the jobless rate to the lowest in almost 50 years and bolstering the central bank’s case for further interest rate hikes.
Employment rose 88,400 from a month earlier driven largely by full-time roles, the Australian Bureau of Statistics said on Thursday. Economists had predicted an addition of 30,000 jobs.
The unemployment rate fell to 3.5 per cent, the lowest level since August 1974. The Australian dollar was little changed at 11.34 am in Sydney.
The strength in hiring comes as Australia’s job vacancy rate hit a record high, suggesting unemployment has further to fall. The figures will likely keep Reserve Bank policy makers set on their monetary tightening path to help rein in surging inflation.
The RBA has hiked by 125 basis points to 1.35 per cent in back-to-back moves since May and is widely expected to keep its foot on the accelerator for the rest of the year.
“With the incredibly strong labour market, the RBA can act more aggressively against inflation than otherwise would be the case,” Harry Murphy Cruise, economist, Moody’s Analytics, said ahead of today’s data.
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“Yes, higher rates will dent demand, but with employers screaming for more workers, we shouldn’t see higher borrowing costs manifest into higher unemployment.”
The labour force participation rate – the share of the population that is working or looking for jobs – inched higher to 66.8 per cent.
That chimes with growing complaints about worker shortages and an inability for employers to fill open positions – a recipe for sustained wage pressures. BLOOMBERG
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