ONLY CHARTS #130

Aus labour market

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1. Australia’s unemployment rate was 4.051% in June, so just ticked higher to 4.1% from 4.0% in May on a rounded basis - basically unchanged. That occurred alongside a strong increase in employment, taking the employment-to-population ratio 0.1ppts higher to 64.2%.

The unemployment rate is tracking in line with the RBA’s latest forecasts. The unemployment rate rose by just over 0.1ppts in quarterly-average terms in Q2.

A key question for the RBA is whether inflation can be reasonably expected to return sustainably to 2.5% alongside the jobless rate rising to just 4.3% which is at the lower end of its NAIRU estimates. We doubt it.

The resilience of Australia’s labour market continues to stand out among peer economies. Employment-to-population ratios are typically falling steadily, with the US somewhat of an exception.

Among economies with high household debt, the modest rise in Australia’s unemployment rate stands out.