Jobs data underlines weakening economy
The unemployment rate was unchanged at 5.7 per cent in July because fewer people looked for work.
The dollar lost half a cent on the jobs report, falling to US89.73¢ before rebounding on stronger Chinese trade data. It was buying US90.84¢ late Thursday.
The data underscored a slowdown in the economy amid a shift away from mining-led growth. While the report was soft, the figures were not overly weak and reflected the Reserve Bank's outlook, economists said.
A gradual deterioration in the unemployment rate was expected, with growth in jobs unlikely to keep pace with the rising population. The employment-to-population ratio dropped to a seasonally adjusted 61.4 per cent last month.
A softening jobs market was 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 6700 while part-time jobs shrank 3500, reversing most of the gains in June.
The figures came two days after one of the forward indicators for employment, the ANZ's job advertisement series, found job ads had fallen for the fifth straight month last month.
The data also followed the RBA's easing of the cash rate to a historic low of 2.5 per cent, with its board acknowledging the recent rise in unemployment.
A rise in total hours worked could be a reflection of the political uncertainty surrounding the election and firms' cautiousness about hiring staff before then, economists said.
"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," said HSBC's chief economist for Australia, Paul Bloxham.
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 dollar and signs of a US revival, Commonwealth Bank senior economist Michael Workman said.
In Western Australia and Queensland, employment growth was expected to slow as the resources investment boom peaked.
The unemployment rate rose 0.2 per cent to 5.6 per cent for NSW, and eased slightly to 5.7 per cent in Victoria. Queensland's jobless rate fell to 5.9 per cent and was steady at 4.6 per cent in WA.
Frequently Asked Questions about this Article…
The July jobs report showed the unemployment rate was unchanged at 5.7% — a four‑year high — as fewer people looked for work even though the economy shed 10,200 jobs.
Australia lost 10,200 jobs in July, with full‑time positions falling by 6,700 and part‑time jobs shrinking by 3,500, reversing most of June’s gains.
The softening jobs market supports the RBA’s easing stance — the cash rate has been cut to a historic low of 2.5% — and keeps the door open for further rate cuts as unemployment has risen.
The jobs report pushed the Australian dollar down about half a cent to roughly US89.73¢ before it rebounded on stronger Chinese trade data, trading around US90.84¢ late Thursday.
The employment‑to‑population ratio dropped to a seasonally adjusted 61.4%, signaling jobs growth is not keeping pace with population growth. For investors, that underlines a slowing economy and the broader shift away from mining‑led growth noted in the report.
Interest rate‑sensitive states such as New South Wales and Victoria were benefiting from easier monetary policy and a weaker dollar, while Western Australia and Queensland were expected to see employment growth slow as the resources investment boom peaks. July state rates: NSW 5.6% (up 0.2%), Victoria 5.7% (slightly eased), Queensland 5.9% (fell), and WA 4.6% (steady).
ANZ senior economist Justin Fabo said trend total employment growth is basically zero and full‑time employment is falling. HSBC’s Paul Bloxham noted firms may boost hours rather than hire because of election uncertainty. Commonwealth Bank senior economist Michael Workman said interest‑rate sensitive states were benefiting from easier policy, a falling dollar and some US recovery.
Yes. Economists in the article said rising total hours worked may reflect firms being cautious about hiring before the election — preferring to increase hours for existing staff until there’s clarity on future tax and regulatory settings.
Call 1300 880 160
Start a chat
Schedule a call
