33,500 jobs gain is very close to consensus expectations (35,000), although a slight increase in unemployment may encourage the Reserve Bank of Australia (RBA) to ease to a 25 basis point gain at its next meeting
Not Much To Ignore This Report
With the overall employment numbers more or less in line with consensus forecasts, including a solid increase of 58,800 full-time jobs, offsetting a decline of 25,200 part-time, this report really has no bearing on the RBA’s further policy decisions. However, with the RBA hinting that it is looking for a reason to slow down the pace of tightening from now on, there’s nothing stopping them from doing so at the October meeting if nothing else upsets that view.
The unemployment rate is rising
One factor supporting the view of 25 basis points instead of 50 is that the unemployment rate increased slightly in August, from 3% to 3.5%. The number of unemployed people increased by 1,100 people, mainly reflecting an increase in the number of people entering the labor market looking for work (perhaps because it is harder to make a living with inflation above 6%). Therefore, this does not really mean a real easing of the labor market. But maybe that means it’s getting closer.
The market reaction to the data was mild, with the exception of the temporary AUD selling as the initial numbers were misreported as no change in employment.