Australia's monthly labour force report for July is out this morning (1130 AEST). Although employment is expected to moderate following a solid rise over the previous quarter, the consensus forecast is for the unemployment rate to hold at 4.4%. The RBA has kept rates on hold since May but maintains the labour market is still relatively tight - despite raising its outlook for the unemployment rate following recent data. Market-implied pricing for one further rate hike this year is around 50%.
July preview: Does unemployment rise?
Employment is expected to moderate to a 13.5k rise in July after accelerating by 76.3k last time out in June. Estimates for the print cover a wide dispersion ranging from -15k on the low side to +25k top side. Expectations for the unemployment rate are set for an unchanged 4.4% (range: 4.3-4.5%). However, the unemployment rate could face some upside pressure if employment was to cool as expected and labour force participation increases.
June recap: Employment accelerates holding unemployment at 4.4%
Employment surged to a 76.3k rise in June, a strong upside outcome on consensus (15k) and the largest increase since April last year. That came after a 44k lift in May. The June result was partly driven by a larger-than-usual number of people who were attached to a new job in May but were yet to start work. The part-time segment was the key contributor with a 47k rise but full time employment also increased by 29.3k.
On the strength of employment growth in June, the unemployment rate held steady at 4.4% even as the participation rate increased from 66.7% t0 67%, an 11-month high. However, with the underemployment rate rising from 6.3% to 6.5%, labour force underutilisation lifted from 10.7% to 10.9% to be at its highest since late 2021.
