Australia’s Unemployment Rate rose to 4.3% in June from 4.1% in May, according to the official data released by the Australian Bureau of Statistics (ABS) on Thursday. The figure came in above the market consensus of 4.1%.
Furthermore, the Australian Employment Change arrived at 2K in June from -1.1K in May (revised from -2.5K), compared with the consensus forecast of 20K.
The participation rate in Australia increased to 67.1% in June, compared to 67.0% in May. Meanwhile, Full-Time Employment decreased by 38.2K in the same period from 41.9K in the previous reading (revised from 38.7K). The Part-Time Employment increased by 40.2K in June versus -43K prior (revised from -41.2K).
Sean Crick, ABS head of labour statistics, said with the key highlights noted below
The employment-to-population ratio remained at 64.2 per cent, and the participation rate rose to 67.1 per cent.
Hours worked fell 0.9 per cent in June, following a rise of 1.4 per cent in May.
This month we saw a decrease in full time hours worked, down 1.3 per cent, associated with a 0.4 per cent fall in full time employees.
Market reaction to the Australia’s employment data
The Australian Dollar (AUD) attracts some buyers following the employment data. At the time of writing, the AUD/USD pair is trading 0.56% lower on the day to trade at 0.6492.
Australian Dollar PRICE This week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.69% | 0.77% | 0.04% | 1.02% | 1.14% | 0.53% | |
| EUR | -0.41% | 0.26% | 0.38% | -0.38% | 0.59% | 0.72% | 0.11% | |
| GBP | -0.69% | -0.26% | 0.06% | -0.64% | 0.33% | 0.46% | -0.01% | |
| JPY | -0.77% | -0.38% | -0.06% | -0.63% | 0.24% | 0.41% | -0.21% | |
| CAD | -0.04% | 0.38% | 0.64% | 0.63% | 0.98% | 1.11% | 0.49% | |
| AUD | -1.02% | -0.59% | -0.33% | -0.24% | -0.98% | 0.10% | -0.48% | |
| NZD | -1.14% | -0.72% | -0.46% | -0.41% | -1.11% | -0.10% | -0.61% | |
| CHF | -0.53% | -0.11% | 0.01% | 0.21% | -0.49% | 0.48% | 0.61% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
This section below was published at 21:30 GMT on Thursday as a preview of the Australia Employment report
- The Australian Unemployment Rate is expected to remain steady at 4.1% in June.
- Australia is expected to have added 20,000 new job positions in the month after losing 2,500 in May.
- AUD/USD gains downward traction around 0.6500, aims for lower lows.
Australia is set to release the June employment report on Thursday at 1:30 GMT. The Australian Bureau of Statistics (ABS) is expected to announce that the country added 20,000 new job positions in the month, reversing the 2,500 lost positions announced in May. The Unemployment Rate is foreseen steady at 4.1%, while the Participation Rate is also expected to remain unchanged at 67%. Ahead of the announcement, the Australian Dollar (AUD) is under strong selling pressure amid fears dominating financial boards.
Australian ABS reports both full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs imply working 38 hours per week or more and usually include additional benefits, but they mostly represent consistent income. On the other hand, part-time employment generally means higher hourly rates but lacks consistency and benefits. That’s why the economy prefers full-time jobs.
The 2,500 jobs lost in May were less concerning than the crude number, as, over the month, the country managed to add 38,700 full-time jobs while losing 41,200 part-time positions. At the end of the day, full-time jobs weigh more than part-time ones when it comes to measure the labor sector health.
Australian unemployment rate expected to hold steady in June
Market analysts anticipate the Australian Unemployment Rate will remain at 4.1%. It has been stable around that level for almost a year, dropping to 4% a couple of months early in 2025, but overall steady, a relief for policymakers.
The Reserve Bank of Australia (RBA) has been cautious when it comes to trimming interest rates and has been among the latest major economies to abandon the tightening monetary policy cycle. Easing inflationary pressures and tepid growth supported the decision, yet the labor market has remained tight.
The RBA Board met earlier in July and decided to maintain the Official Cash Rate (OCR) unchanged at 3.85%, against market bets of a 25 bps cut, citing elevated uncertainty among the reasons behind the decision. On a positive note, officials acknowledged “that the most extreme outcomes are likely to be avoided.”
Regarding the employment situation, the Monetary Policy Statement shows: “Various indicators suggest that labour market conditions remain tight. Measures of labour underutilisation are at relatively low rates, and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers. Looking through quarterly volatility, wages growth has softened from its peak, but productivity growth has not picked up, and growth in unit labour costs remains high.”
With that in mind, tepid job creation could accelerate the loosening of monetary policy. The decline in part-time jobs, however, is not as bad news as it could be in full-time ones.
Governor Michele Bullock spoke following the July decision. She said that it is appropriate for the Board to have a cautious, gradual stance on easing, adding the effects of the 50 bps cut delivered this year still had to “flow through.” She also noted that the Board is confident on a path to ease further, leaving the door open for another 25 bps cut before year-end.
With that in mind, an employment report in line with expectations would have no actual impact on the AUD. Signs of a strengthening labour market could further delay potential interest rate cuts and benefit the Aussie, while the opposite scenario is also valid.
When will the Australian employment report be released, and how could it affect AUD/USD?
The ABS June report will be released early on Thursday, and the Australian economy is expected to have added 20,000 new job positions in the month, while the Unemployment Rate is foreseen steady at 4.1% and the Participation Rate at 67%.
Ahead of the announcement, the AUD/USD pair battles to retain the 0.6500 mark amid a risk-averse environment, benefiting the USD. Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair has scope to extend its slide, according to intraday technical readings, as it is accelerating its slump below all its moving averages in the 4-hour chart. Even further, technical indicators accelerated south, with room to extend their declines before reaching oversold conditions.”
Bednarik adds: “The 0.6480 area comes as immediate support, as the pair bottomed around earlier in July. Further declines expose the 0.6430 region, en route to the 0.6400 mark. AUD/USD would need to recover above 0.6520 to shrug off the negative stance, with additional gains exposing the 0.6570 area.”
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Economic Indicator
Unemployment Rate s.a.
The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.
