Australian employment saw a substantial increase of 76,300 people in June, far surpassing economists' median forecast of 40,000 new jobs. This robust job growth kept the unemployment rate steady at 4.4% for the second consecutive month, according to data released by the Australian Bureau of Statistics (ABS). The strong figures are likely to heighten expectations for another interest rate hike by the Reserve Bank of Australia (RBA) at its upcoming meeting in August, as the labor market continues to show resilience despite previous monetary tightening.
The rise in employment was driven by both full-time and part-time positions. Full-time employment increased by 29,300 people, while part-time employment saw a larger jump of 47,000 people. The participation rate also edged up to 67.0% from 66.7% in May, indicating more people are either working or actively looking for work. The employment-to-population ratio increased by 0.3 percentage points to 64.0%.
Despite the significant increase in employment, the unemployment rate remained at 4.4%, as previously reported for May. However, the number of unemployed people did slightly increase by 12,700 to 686,800. This suggests that while more people are entering the workforce and finding jobs, a larger pool of individuals is also seeking employment. The underemployment rate also rose slightly to 6.5% from 6.3% in May, indicating some workers are still seeking more hours.
Economists had previously noted that Australian job growth was starting to slow in May, with some suggesting it was below the 'break-even' level needed to prevent a rise in unemployment. However, the June data demonstrates a strong rebound, challenging these projections and underlining the persistent tightness in the Australian labor market. This sustained strength in employment, combined with rising wages, is a key factor the RBA considers when making decisions on monetary policy.
