Data released by the Australian Bureau of Statistics (ABS) showed that the unemployment rate increased markedly in April, reaching its highest level since January 2024, as labor force growth outpaced job creation. Overall, the latest data dispelled market participants' concerns about further tightening of the RBA's monetary policy, while markets now estimate a 54% probability of a rate cut at the December meeting of the Central Bank.
The report showed that the unemployment rate rose to 4.1% from 3.9% in March (revised from 3.8%). Economists had expected the unemployment rate to be 3.9%. The number of unemployed individuals rose by 30,300 to 604,200. Meanwhile, employment increased by 38,500, offsetting a decrease of 5,900 in March (revised from -6,600). Consensus estimates suggested employment growth of 23,700. Part-time employment increased by 44,600, while full-time employment declined by 6,100. The participation rate increased by 0.1% compared to March, to 66.7%, while hours worked were flat. The employment-to-population ratio remained at 64.0% in April, indicating that jobs gains were only just keeping pace with rapid population growth. The RBA expected the unemployment rate to gradually rise to 4.2% by the end of the year as employment lags behind labor force growth, and is keen to not risk a deeper downturn by raising interest rates too far, which have already reached a 12-year high and are putting pressure on borrowers across the economy.