The Australian Bureau of Statistics (ABS) has released labour market data for July, which showed that Australia lost 40,900 jobs (-0.3%) over the month, with hours worked also falling by 16 million (-0.8%):
Jobs and hours worked down in July.
However, because the labour force participation rate fell by 0.3% to 66.4%, the nation’s unemployment rate actually fell by 0.1% to 3.4% – the lowest rate since August 1974:
Lower participation causes unemployment rate to fall.
The below table summarises the key movements:
Australia’s labour market weakened in July.
The loss of 40,900 jobs badly missed analyst’s expectations, which expected growth of 25,000 in July.
When viewed alongside yesterday’s disappointing wage growth, the case for the RBA to continue hiking rates aggressively has been extinguished.
The labour market boom appears to be over and, unlike overseas, there is no wage-price spiral in Australia.
Moreover, with the Albanese Government preparing to ramp immigration to its highest ever level in the upcoming October federal budget, unemployment is set to rise, killing prospects for wage growth.
