Australia’s unemployment rate remained at a seasonally adjusted 5.2 per cent in June, in line with consensus expectations.
The number of employed persons rose by a net 500 to 12.87 million during the month, according to Thursday’s data from the Australian Bureau of Statistics, with a 21,100 increase in people with full-time work offsetting a 20,600 decrease in people with part-time work.
The participation rate remained steady at 66 per cent and underemployment dropped from 8.6 per cent to 8.2 per cent.
Analysts expected the overall jobless rate to remain steady as a temporary boost from election-related jobs receded and the effect of the June cash rate cuts and tax reforms are yet to have an impact.
NAB economist Kaixin Owyong noted the third consecutive 5.2 per cent monthly result was well above the 5.0 per cent average rate the reserve Bank had forecast for the June quarter in its May Statement of Monetary Policy.
“As such, the RBA will be forced to lift its unemployment rate forecast track in August, although we don’t think that will prompt an immediate third rate cut,” Ms Owyong said.
AMP Capital chief economist Shane Oliver said while the unemployment figure was steady, jobs growth “slowed to a crawl in June”, heralding further rises in unemployment in 2019.
“After perking into recent months, jobs growth looks to be slowing again,” Dr Oliver said. “With our Jobs Leading Indicator slowing to its weakest since March 2014 on the back of slowing jobs ads, job vacancies and hiring plans, we see a further slowdown in jobs growth over the next six months as the housing construction downturn flows through the economy.”
Dr Oliver believed unemployment was likely to head towards 5.5 per cent by the end of the year.
EY’s chief economist Jo Masters said the figures were broadly in line with market expectations and was unlikely to change the Reserve Bank’s thinking on further cuts to the official cash rate.
“With the unemployment rate steady, and under-employment falling, the data is unlikely to shift expectations about the timing of any additional rate cuts from the RBA,” Ms Masters said.
“After back-to-back rate cuts, the RBA is likely to pause for a few months, to allow time for the earlier rate cuts to flow into the economy.”
Ms Masters said while the unemployment rate was steady, it was encouraging to see a sharp fall in under employment, to 8.2 per cent from 8.6 per cent in May.
That decline occurred in all states except Western Australia and South Australia.
The Australian dollar jumped slightly after the data’s release from 70.21 US cents to 70.26 by 1134 AEST.