Australia’s unemployment rate has held steady at 4.1%, in line with economists’ forecasts, but there are signs of softening in the jobs market, which could be good news for mortgage holders. Data released today by the Australian Bureau of Statistics showed the economy added nearly 16,000 new jobs last month. That was slightly below market expectations, which could suggest the Reserve Bank could soon be close to its first interest rate cut in years.
The unemployment rate remained unchanged for the third month in a row. (Nine) “The job creation component was lower than economists were expecting,” said 9News Finance Editor Chris Kohler. “So at least now the numbers are starting to show some signs of weakness…” While the RBA does not necessarily need to see a rise in the unemployment rate to cut rates as we would expect, it does indicate the weakness it needs to see. “We expected the unemployment rate to rise, it just hasn’t happened yet.” At the moment, February is still seen as the most likely month for a rate cut. “October was the third consecutive month (and fifth since April) that the unemployment rate hit 4.1, despite relative weakness in other areas of the economy.“The unemployment rate remains very, very low, and at 4.1 per cent it is very low given the slowdown we’ve seen,” Kohler said. “Economists have beaten their forecasts in seven of the past eight months – they had been expecting the unemployment rate to climb further to 4.5 per cent, but it remains very low.” “While the number of unemployed people is strong, it is still higher than a year ago, but it is still well below where it was at the start of the pandemic.” “There were 67,000 more unemployed people in October than a year ago, but there were still 82,000 fewer people unemployed than in March 2020,” said Bjorn Jarvis, director of labour statistics at the ABS. “While there was employment growth in October, the 0.1 per cent increase was the slowest in recent months.” “This was lower than in each of the previous six months, when employment grew by an average of 0.3 per cent per month.” October’s population growth Despite small increases in both employment and unemployment, the labour force participation rate fell slightly to 67.1 per cent, while the employment-to-population ratio remained at a record high of 64.4 per cent.”
