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The unemployment rate climbed from 4.1 per cent in May to 4.3 per cent in June, as reported by the Australian Bureau of Statistics (ABS).
This equates to around 34,000 more unemployed Aussies. There was a decrease of 38,200 full-time employees and a rise of 40,200 part-time employees.
Australian employment has stagnated in recent months. The current unemployment rate is at its highest since November 2021.
Further highlighted by the ABS was an increase in underemployment, hitting 6 per cent in June.
Monthly hours worked also decreased to 1,974 million, a drop of 0.9 per cent, following a 1.4 per cent rise in May.
Indeed’s APAC economist Callam Pickering said the surprise cash rate hold at the Reserve Bank’s July meeting was the “wrong decision” and believes they “won’t make the same mistake twice.”
“The global economic outlook has recently soured and Australia’s major trading partners are at the centre of it. There are tentative signs of labour market conditions softening, economic growth is mediocre and inflation is increasingly benign,” said Pickering.
“The RBA will need to cut rates at least another couple of times this year to provide sufficient support to households and businesses, while ensuring that the unemployment rate remains low and we avoid recession.”
Now, each of the major banks has penned a cut at the August RBA meeting. While many economists have been quick to guarantee this, the surprise hold in July’s meeting was also widely expected to be a cut.
The lesson to be learnt from the recent decision is not to count your chickens before they hatch, said Accendo Financial’s founding partner Trent Carter.
With uncertainty continuing to be the industry’s favourite buzzword of 2025, the same should be applied to interest rates.
Pickering said this uncertainty is the greatest risk to Australia’s job market and is making it hard for businesses to plan ahead.
“It’s too soon to say whether this has impacted recent employment trends, but it’s certainly not evident in measures of job vacancies,” he said.
The ABS is releasing its Consumer Price Index (CPI) data on 30 July, which the RBA will use to reach an agreement on the August monetary policy meeting.
“While quarterly inflation data is still a week or so away, today’s data will reinforce the weakness that is continuing within the private side of the Australian economy, and even by itself should be enough for the RBA to drop the cash rate at its next meeting,” said KPMG chief economist Brendan Rynne.
[Related: Don’t count your chickens: August rate cut far from a ‘shoo-in’]
