Fresh ABS labour force data revealed the number of people counted as officially unemployed increased by 10,000 last month, while an additional 50,000 landed jobs, in seasonally-adjusted terms.
The wild swings in seasonally-adjusted employment numbers mean the trend figure has been more reliable lately, showing a steady unemployment rate of 4.0%.
With unemployment and employment both increasing, the seasonally adjusted participation rate rose by 0.1 percentage points to 66.9%, a whisper below the record high 67% in November 2023.
The June jobs data showed the employment-to-population ratio also saw a slight uptick of 0.1 percentage point to 64.2%, also close to the 64.4% record.
The latest figures were in line with the market consensus of a 4.1% lift in June, though the number of people who found jobs was stronger than the 20,000 forecast.
Similarly, the sum of people looking for work remains well below pre-pandemic figures.
Despite bouncing back from a low of 491,000 jobless Aussies in October 2022 to 608,000 in June, the rate remains 14.2% or 100,000 lower than the records posted before the Covid-19 pandemic.
According to the Bureau of Statistics data, the unemployment rate was 0.5 percentage points higher than in June last year, but 1.1 percentage points lower than in March 2020.
“[The high employment-to-population ratio and participation rate], along with the continued high level of job vacancies, suggests the labour market remains relatively tight, despite the unemployment rate being above 4% since April,” ABS head of labour statistics Bjorn Jarvis said.
In trend terms, the unemployment rate and employment-to-population ratio were both flat, registering the same print in May; while the participation rate marginally increased by 0.1 ppt.
Fewer people take annual leave
Seasonally adjusted hours worked has maintained its upswing last month, going by up 0.8%.
The growth rate was broadly in line with employment, according to the ABS.
Despite the marked increase in illness-related absences, the decline in the number of workers taking vacation days in June has offset the potential drop in hours worked, indicating that people may be delaying their holiday plans.
“Around 4.5% of employed people in June could not work their usual hours because they were sick, compared to the pre-pandemic average for June of 3.6%,” Mr Jarvis said.
"However, we also saw fewer people taking annual leave in June. There were around 12.5% of people working fewer hours because they were on leave, compared with the pre-pandemic average for June of 14.5%.”
The monthly hours worked in all jobs increased to 1,967 million last month (both seasonally adjusted and trend).
Consistent with the increase in hours worked, the seasonally adjusted underemployment rate fell to 6.5%.
The underutilisation rate, which combines the unemployment and underemployment rates, also fell 0.2 ppts to 10.5%.
Jobs data out, inflation next
The latest jobs figures falling broadly in line with the RBA’s May forecast reinforce the view that the RBA will refrain from further raising the cash rate to maintain the gains in the labour market.
The Reserve Bank expects the unemployment rate to land at 4% in Q2, and to further rise to 4.2% in the December quarter until it hits 4.3% by end-2025.
“Combined with weak consumer sentiment and economic activity, the labour market is likely to continue slowing, which should see the next RBA move being a rate cut,” ANZ senior economist Blair Chapman said.
Prior to the release of the ABS labour force survey, investors were assessing no change in the cash rate in the August meeting as an 85% chance.
The remaining 15% were expecting a 25 basis point increase.
However, a lot still hinges on the second-quarter outcomes of the consumer price index (CPI), due next week.
Historically, a very strong CPI print – that is, a 1% quarterly uplift – could see another RBA hike.
However, economic experts believe doing so would be “at odds” with broader economic data and the expectation of cuts from other major central banks.
The prospects of the RBA gradually easing their monetary policy had slightly improved in recent weeks, as the US moves closer to interest rate cuts.
CBA and Westpac maintain their position of a November start date for rate cuts, despite ANZ delaying its forecast to February 2025 and NAB to May 2025.
CBA earlier said “sufficiently strong” jobs data would see them revise their forecast to a later date.
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