Australia’s August Labor Market Data Shows Strength Despite High Interest Rates

Data from the Australian Bureau of Statistics reflects the resilience of the Australian labour market in a high interest rate environment.

The economy added a net 47.5K jobs in August, above the expected gain of 28.0K and slightly below the downwardly revised gain of 48.9K in July.

The gains came mostly from part-time work, although full-time work showed smaller losses than traders had expected during the month.

Here is a breakdown of the August figures:

• Network of 47.5k jobs added (vs. 28.0k expected) in August
• Net additions for July have been revised down. From 58.2k to 48.9k
• Work forceParticipation rate It settled at a record high of 67.10%.
• Full time work Down 3.1K (-7.0K expected)
• Part time work Up 50.6K (35.0K expected)
• Monthly working hours All jobs rose 0.2% on a monthly basis, higher than in July.

Link to the Australian Labour Force Survey August 2024

The employment-to-population ratio – a key measure of the Reserve Bank of Australia – rose from 64.2% to 64.3%. This is just below the record high of 64.4% and suggests that workers entering the labour market are still finding jobs likeEmployers continue to look to fill a larger than usual number of vacant positions.“

Australian Dollar vs Major Currencies: 5 minutes

The Australian dollar lost some ground in early Asian trading, likely due to a stronger US dollar and weaker risk appetite after the US Federal Reserve cut interest rates by 50 basis points in the previous US session.

However, the announcement of higher-than-expected job gains, increased monthly working hours and a higher employment-to-population ratio supported the RBA’s case against the need to cut interest rates in the near term.

The Australian dollar generally rose on the news and maintained its upward momentum for about thirty minutes before settling just above its opening prices.

The Australian dollar is currently posting its biggest daily gain against safe havens such as the Japanese yen and Swiss franc, and has the smallest points advantage against the New Zealand dollar and the US dollar.