- Unemployment rate remains at 3.5% in June
- 32,600 new jobs added
- Employment-to-population ratio at a record-high of 64.5%
Despite the challenges faced by households and businesses due to soaring interest rates and record mortgage repayments, Australia’s job market continues to thrive. In June, the unemployment rate remained unchanged at its lowest levels in nearly 50 years. The Australian Bureau of Statistics reported that the economy added an impressive 32,600 new jobs during the month.
- Employment-to-population ratio: Record-high of 64.5%
- Participation rate: Decreased by 0.1 percentage point to 66.8%
The employment-to-population ratio reached a new record high of 64.5%, indicating a strong labor market. However, the participation rate saw a slight decline from its peak record in May.
Implications for Interest Rates
The robust employment data is expected to fuel expectations of a further increase in official interest rates in August. The Reserve Bank of Australia has stated that future rate hikes will be dependent on data. The RBA will closely analyze second-quarter inflation data and retail sales figures to determine whether additional tightening of monetary policy is necessary.
Strong Hiring Signals Solid Economic Demand
Despite a significant increase of 400 basis points to the cash rate, the strong hiring numbers in June suggest that underlying demand in the economy remains solid. This positive outlook reduces the possibility of an upside surprise in the upcoming second-quarter Consumer Price Index (CPI) data.
Significant Increase in Employment since the Pandemic
The demand for labor is evident in the employment figures. Since before the pandemic, there are over 1 million more employed individuals, reflecting a considerable growth in employment rates. In June 2023, 64.5% of people aged 15 years or older were employed, marking a 2.1 percentage point increase since March 2020.
Growth in Full-Time and Part-Time Employment
- Full-time employment: Increased by 380,000 people in the past year
- Part-time employment: Rose by 30,000 people
The growth in hours worked was more significant than the growth in employment during June. Monthly hours worked increased by 0.3%, outpacing the 0.2% rise in employment. As a result, full-time employment experienced substantial growth of 380,000 people over the past year, while part-time employment saw a rise of 30,000 individuals.