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Australian employment dipped in May after solid gains the previous month, data showed on Thursday, though full-time jobs jumped and the jobless rate held steady in a sign of continued resilience in the labour market.
Figures from the Australian Bureau of Statistics showed net employment dipped 2,500 in May from April, when they rose a revised 87,600. That was below market forecasts for a 22,500 increase, though the series has been very volatile in recent months.
The jobless rate held at 4.1%, where it has been for over a year now. The participation rate dipped slightly to 67.0%.
Other details of the report were strong, with full-time jobs rising 38,700 in May and hours worked rebounding by a solid 1.3%, after a flat April.
There was little market reaction as the report did not move the dial on policy easing expectations from the Reserve Bank of Australia. Swaps imply a 65% probability for a quarter-point rate cut in July, more or less the same as before.
“The drop in jobs does not reflect a sudden reversal of the labour market’s fortunes,” said Kar Chong Low, an economist at Oxford Economics Australia
“Instead, part of the fall reflects normalisation following exceptionally strong growth in April. Similarly, the rebound in hours worked, the tick down in underemployment, and the jump in full-time work show firms are still demanding workers’ time.”
The RBA has already cut interest rates twice since February to 3.85% as inflation slowed to the target band of 2-3%. However, consumers have stayed stubbornly frugal and economic growth has remained subdued, with U.S. tariffs and geopolitical conflicts darkening the economic outlook.
All of that argues for more policy easing from the RBA in the months ahead, with investors expecting a total easing of 70 basis points by the end of the year.
In the meantime, the labour market has proved to be resilient. The unemployment rate remains low at 4.1% and job advertisements are stabilising above pre-COVID levels. Wages have been well-behaved, with growth in the private sector mostly subdued.
The central bank is expecting the unemployment rate to peak just a little higher at 4.3% this cycle.
(Reporting by Stella Qiu and Wayne Cole; Editing by Christian Schmollinger and Sonali Paul)
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