Australia: Unemployment rate remains unchanged in September
Latest reading: The seasonally adjusted unemployment rate was stable at August’s 4.1% in September, in line with market expectations. September’s reading marked the joint-highest unemployment rate since January 2022. Meanwhile, the number of employed people rose by 64,100 in September in seasonally adjusted terms, improving from the 42,600 rise recorded in August. Both full-time and part-time employment increased in September. Meanwhile, the seasonally adjusted labor-force participation rate rose to a fresh all-time high of 67.2%—surprising markets on the upside—while the underemployment rate fell by 0.2 percentage points to 6.3%.
Panelist insight: Commenting on the outlook, Goldman Sachs’ Andrew Boak, Oscar To and William Nixon stated:
“Growth in labour supply remains very firm in Australia, likely reflecting strong population growth and increased incentives to seek work given acute cost-of-living pressures. Looking forward, while we continue to expect Australia’s labour market to gradually soften alongside the signal from a range of leading indicators, we now expect the unemployment rate to rise to 4.3% by end 2024 (prior 4.6%) before rising to 4.6% by mid 2025.”
Nomura’s David Seif and Andrew Ticehurst added:
“We think the September labour force report was strong on all metrics. It is striking that job growth has now beaten consensus expectations for six consecutive months, and this raises the question of where economists have gone wrong, with respect to these data. Our judgement is that strong net immigration is a factor. For the RBA, these data are likely to reinforce its concerns over a still-tight labour market, which sits at the core of its view that the supply side of the economy is constrained. This is a key driver of its view that inflation is likely to grind lower only slowly and not approach the midpoint of its 2-3% target band until mid-late 2026. An early RBA dovish pivot now appears less likely.”