Data from the Australian Bureau of Statistics (ABS) reflected the resilience of Australia’s labor market amidst an elevated interest rate environment.
The economy added a net 47.5K jobs in August, higher than the expected 28.0K increase and only slightly lower than July’s downwardly revised 48.9K uptick.
The gains came mostly from part-time employment though full-time jobs showed fewer losses than traders priced in for the month.
Here’s a breakdown of August’s numbers:
- A net of 47.5K jobs were added (vs. 28.0K expected) in August
- July’s net additions were revised lower from 58.2K to 48.9K
- The labor force participation rate steadied at a record high of 67.10%
- Full-time employment fell by 3.1K (-7.0K expected)
- Part-time employment rose by 50.6K (35.0K expected)
- Monthly hours worked for all jobs increased by 0.2% m/m higher from July
Link to Australian Labor Force Survey for August 2024
The employment-to-population ratio—a key metric for the Reserve Bank of Australia (RBA)—edged higher from 64.2% to 64.3%. This is just under the record high of 64.4% and signals that workers who enter the labor force are still finding jobs as “employers continue to look to fill a more than usual number of job vacancies.”
Australian dollar vs. Major Currencies: 5-min
Overlay of AUD vs. Major Currencies Chart by TradingView
The Australian dollar lost ground in early Asian session trading, likely due to U.S. dollar strength and lukewarm risk appetite following the Fed’s 50bps interest rate cut in the previous U.S. session.
However, the release of higher-than-expected job gains, more monthly hours worked, and a higher employment-to-population ratio supported the RBA’s case against the need for a short-term interest rate cut.
AUD shot up across the board at the news and maintained its bullish momentum for about thirty minutes before steadying just above its open prices.
The Aussie is currently posting the biggest intraday gains against safe havens like the Japanese yen and Swiss franc and has the least pip advantage against the New Zealand and U.S. dollars.