Australia\u2019s unemployment rate jumped to 4.5% in September, the highest since November 2021, according to data released Thursday by the Australian Bureau of Statistics. The unexpected spike triggered a sharp rise in market expectations for a rate cut by the Reserve Bank of Australia (RBA) in November, with odds rising to 72%, up from 40% before the data release.<\/p>\n\n\n\n
The labor market’s weakness comes as the RBA navigates a complicated economic landscape marked by sticky inflation and unexpectedly strong consumer spending. Though net employment rose by 14,900 in September, the gain fell short of the market forecast of 20,000. The unemployment surge largely stemmed from a 48,800-person increase in the labor force as more Australians re-entered the job market.<\/p>\n\n\n\n
Financial markets swiftly responded to the data. The Australian dollar fell 0.2% to $0.6497, and three-year bond futures jumped 10 ticks to 96.62. The benchmark ASX 200 index rallied to a record high, buoyed by renewed hopes for monetary easing.<\/p>\n\n\n\n
Full-time employment rose by 8,700 while part-time jobs increased by 6,000, partially offsetting August’s revised job losses. However, employment growth has slowed dramatically from 3.5% in January to just 1.3% in September.<\/p>\n\n\n\n
\u201cThe RBA is increasingly caught between a rock and a hard place,\u201d said Harry Murphy Cruise, head of economic research at Oxford Economics Australia. \u201cInflation looks set to come in hotter than the Bank\u2019s latest forecasts, while the labor market is weaker than expected.\u201d<\/p>\n\n\n\n
The RBA held its cash rate steady at 3.60% in September, after three cuts earlier in the year. Core inflation was 2.7% in Q2, within the central bank\u2019s 2\u20133% target range, but recent monthly figures suggest inflation may not have eased further in Q3.<\/p>\n\n\n\n
All eyes are now on the third-quarter inflation report due at the end of October. Analysts say any downside surprise in the inflation print could give the RBA enough justification to proceed with a rate cut at its November meeting.<\/p>\n\n\n\n
Governor Michele Bullock acknowledged earlier on Thursday that rising consumer spending and persistent inflation in some sectors have complicated the case for more easing. Private data also showed job advertisements fell 3.3% in September, the sharpest decline since early 2024.<\/p>\n\n\n\n
\u201cThe RBA now finds itself in a very awkward position,\u201d said Tony Sycamore, analyst at IG. \u201cNowhere within its most recent forecasts did they project unemployment rising to 4.5% \u2014 not this year, not next year, and not in 2027.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Surprise spike fuels rate cut hopes for November Australia\u2019s unemployment rate jumped to 4.5% in September, the highest since November 2021, according to data released Thursday by the Australian Bureau of Statistics. The unexpected spike triggered a sharp rise in market expectations for a rate cut by the Reserve Bank of Australia (RBA) in November, […]<\/p>\n","protected":false},"author":10772,"featured_media":13090,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-13089","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"_links":{"self":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/13089","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/users\/10772"}],"replies":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13089"}],"version-history":[{"count":1,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/13089\/revisions"}],"predecessor-version":[{"id":13091,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/13089\/revisions\/13091"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/media\/13090"}],"wp:attachment":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13089"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13089"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13089"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}