About 47,000 new jobs were created in August, according to the latest figures from the Australian Bureau of Statistics, as the labour market remains at historically tight levels despite the relatively weak economy.
“There are still large numbers of people entering the labour force and finding work, as employers continue to look to fill a more than usual number of job vacancies,” ABS head of labour statistics Kate Lamb said.
“The employment and participation measures remain historically high, while unemployment and underemployment measures are still low, especially compared with what we saw before the pandemic,” she added.
“This suggests the labour market remains relatively tight.”
The flat figures are unlikely to change the Reserve Bank’s thinking ahead of next week’s interest rates decision and prompt an early cut.
“This really doesn’t represent a massive change for the Reserve Bank, 4.2 per cent remains Australia’s unemployment rate,” 9News Finance Editor Chris Kohler said.
“No smoking gun there as they head towards their meeting on Tuesday.
“If we had seen an increase in the unemployment rate, let’s say to 4.3 per cent, which is what CBA economists were expecting, then that might have pulled forward that expectation for an interest rate cut perhaps into this year.
“But as it stands there’s really nothing in this report that shows that we’re going to have an interest rate cut in the next couple of meetings here in Australia.”
That is also unlikely to pressure the RBA into a September cut, with Governor Michele Bullock last month acknowledging the two nations have different rate cycles at the moment.
She signalled the RBA would be unlikely to follow the Fed’s decisions, instead earmarking a potential rise in the Australian dollar on the back of a higher American cash rate.
“If the interest rates in the US start to decline, which people are expecting, that will probably give a bit more support to our exchange rate,” she said in August.
“So our interest rates won’t be so far apart.
“We’ve been criticised by some people saying our interest rates should be … near the United States,” she said.
“But we’ve chosen … very deliberately to try and bring inflation down while not turning the economy into a recession and spiking unemployment. That’s been our strategy,” she said.