Surprise unemployment jump ahead of RBA’s looming rates call
Updated . First published at
The unemployment rate has unexpectedly risen after 6000 people lost their full-time jobs in August, but it’s unlikely to spare Australians from another rate hike next week.
New data released on Thursday morning by the Australian Bureau of Statistics showed the jobless rate rose to 4.6 per cent for last month, up from 4.5 per cent in July.
The jump in unemployment will factor into the RBA’s next interest rate decision, to be handed down on Tuesday. Peter Rae
Economists had expected the figure to remain steady at 4.5 per cent.
The loss of 6000 full-time jobs was partly offset by a rise of 46,000 people in part-time roles, and there were actually more people in work in August than the month before – but also more people looking for work.
“This month there was 39,000 more people in employment, and 28,000 more people in unemployment,” ABS head of labour statistics Sean Crick said.
“This August we recorded a higher proportion of people who were previously not in the labour force moving to being unemployed, compared to recent years.
“The growth in the size of the labour force resulted in the participation rate increasing by 0.2 percentage points to 67.1 per cent.”
The data comes is a crucial piece of the economic puzzle ahead of the Reserve Bank’s next interest rates decision on September 29.
It also follows Governor Michele Bullock saying the jobless rate needs to rise for inflation to fall.
“I think between 4.5 and 5 [per cent] will probably take enough heat out of the labor market that it’ll ease pressure on inflation,” she said on Tuesday.
“But the whole point about inflation being too high at the moment is it’s reflecting the fact that the demand side of the economy is outstripping the ability of the economy to supply the goods and services.
“One evidence of that is that the labor market looks tight.”
The market is widely expecting a 25-basis-point hike next week, and Thursday’s slight unemployment increase is unlikely to stay the RBA’s hand.
“Look, this is heading in the right direction if you want interest rates to stay lower,” Nine political editor Charles Croucher said.
“I don’t think it’s gone up enough to cause a pause that would leave rates on hold.
“So what we will still likely see, and what the markets believe, is that interest rates will go up next Tuesday.
“That might be it, though.
“If the unemployment keeps ticking higher, that’s a sign the economy is slower.
“And that might mean that that’s enough for Michele Bullock and the Reserve Bank team to say ‘that’ll do us’ for interest rate rises.”
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