Australia’s economy added fewer jobs in September than economists had anticipated, potentially relieving pressure on the Reserve Bank of Australia (RBA) to raise interest rates next month.
According to data released Thursday by the Australian Bureau of Statistics, the number of employed people increased by 6,700 from August, falling short of market expectations of 20,000 additional jobs.
Although the unemployment rate dropped to 3.6% from 3.7%, the ABS clarified that this was largely due to some previously employed individuals exiting the workforce. Economists had predicted the unemployment rate to remain stable.
Head of labor statistics at the ABS, Kate Lamb, cautioned, “It is important to remember that a decline in unemployment does not always indicate significantly higher employment.”
The RBA recently stated its vigilance regarding any signals suggesting that inflation may not align with its 2%-3% target zone by 2025.
Minutes from the RBA’s latest rate-setting meeting revealed that next week’s September-quarter inflation report would be influential in determining whether the central bank would resume policy tightening. During the meeting, the cash rate was maintained at 4.10% for the fourth consecutive month.
Lamb commented that the decrease in the unemployment rate implied a relatively tight labor market, albeit with signs of potential softening. She noted a second consecutive monthly decline in hours worked, as well as a 0.1 percentage point drop in the employment-to-population ratio to 64.4%, its average level over the past year.
Lamb added, “The recent decline in hours worked, compared to employment growth, may indicate a weakening in labor market strength. However, this follows a period of particularly strong growth in the past year.”
In September, employment growth significantly decreased compared to August, when the job market appeared to have emerged from a slump with the addition of 64,900 jobs, most of which were part-time. Although another 46,500 part-time jobs were added in September, 39,900 full-time jobs were lost.