Employment weakens on mining decline
The jobless rate remained at a four-year high in July, with the economy shedding 10,200 jobs in a soft reading that has supported the Reserve Bank's interest rate cut.
The unemployment rate was unchanged at 5.7 per cent in July, as fewer people looked for work, while the average hours worked lifted to a new high of 1648.6 million hours.
The dollar lost half a cent on the jobs report, falling to US89.73¢ before rebounding strongly on better-than-expected Chinese trade data. It was buying US90.84¢ late on Thursday.
The data underscored a slowdown in the economy amid a shift away from mining-led growth. While the reports were soft, the figures were not overly weak and reflected the RBA's outlook, economists said.
A deterioration in the unemployment rate was expected, with the monthly growth in jobs unlikely to keep pace with the growing population. Employment-to-population ratio dropped to a seasonally adjusted 61.4 per cent for July.
A softening jobs market was also expected to keep the door open for further rate cuts.
"In trend terms, total employment growth is basically zero. It's only 1000 a month, so it's pretty flat [and] full-time employment is falling in trend terms," ANZ senior economist Justin Fabo said.
Full-time positions fell by 6700, while part-time jobs shrank by 3500, reversing most of the gains in June.
The July figures came two days after one of the forward indicators for employment - the ANZ's job advertisements series - found job ads had fallen for the fifth straight month in July. The data also followed the RBA's easing of the cash rate to a historic low of 2.5 per cent.
"Without a clear view about what the tax and regulatory environment will look like after the election, firms may have been more willing to boost hours rather than hire new staff," HSBC's chief economist for Australia, Paul Bloxham, said.
The July figures pointed to a shift in jobs between mining and non-mining states. Interest-rate-sensitive states such as NSW and Victoria were benefiting from easier monetary policy, a falling Australian dollar and signs of a US economic revival, Commonwealth Bank senior economist Michael Workman said.
In the mining states of Western Australia and Queensland, employment growth remained buoyant but was expected to slow as the resources investment boom peaked, he said.
The softening jobs data increases the focus on the Reserve Bank's statement of monetary policy, which will be released on Friday. A slightly lower growth forecast is expected.