The jobless rate rose to 4.3 per cent, marking a notable shift from the near-record lows observed since the pandemic recovery. The latest data from the Australian Bureau of Statistics (ABS) revealed a net employment increase of 2,000 positions in June. Part-time roles grew by 40,000 and full-time employment by 38,000.
The sharp drop in full-time roles, coupled with a 1.3 per cent decline in monthly hours worked, has raised concerns about the underlying health of the labour market. This uptick in unemployment has added weight to growing calls for the RBA to provide interest rate relief.
After unexpectedly holding the cash rate steady in July, the central bank now faces renewed pressure to respond to signs of weakening economic conditions. Money markets currently suggest an 87 per cent probability of a rate cut in August, up from 77 per cent in the latest employment release.
Economists have pointed to the broader struggles within Australia’s private sector as a key driver of labour market fragility. With conditions deteriorating, analysts argue the RBA must take proactive measures to support economic activity. A third rate cut this year would offer some relief to households grappling with high mortgage repayments and cost-of-living pressures.
The June figures also suggest a changing composition of employment, with growth in public sector hiring offsetting sluggish private sector activity. As government hiring slows, private businesses have not been able to fully absorb displaced workers. This imbalance is being felt more acutely as temporary employment linked to the May federal election phases out.
Labour market weakness was further illustrated by an increase of 34,000 unemployed. This rise reflects more people actively looking for work but not being able to secure positions, underlining a demand-side issue in the job market.
While inflation data remains a key input for the RBA’s monetary policy, the latest unemployment figures on their own may be sufficient to prompt a change in course. With the private sector under strain and consumer confidence faltering, economists believe continued inaction by the RBA risks further dampening growth.
As August approaches, the focus will remain on how the RBA balances inflation concerns against growing evidence of economic softness. For many Australian households, particularly mortgage holders, a rate cut could offer much-needed financial relief during a period of increasing uncertainty.
Contact Accountancy Insurance
We would love to hear from you.
About Accountancy Insurance
Thousands of accounting firms offer our tax audit insurance solution, Audit Shield to their clients.
Find out why.