Unemployment lifts to 4.2% in July
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The news: The unemployment rate increased to 4.2% in July, a 0.1 percentage point rise over the month, higher than the expected 4.1% consensus, according to new figures published by the Australian Bureau of Statistics.
The numbers: The number of unemployed people increased by 24,000 while the number of employed grew by about 58,000. The participation rate increased to 67.1%.
There are now 637,000 unemployed people, but this is 70,000 below pre-Covid.
Monthly hours worked increased 0.4%.
The underemployment rate dropped 0.1 percentage points to 6.3% while underutilisation fell slightly to 10.6%.
The ABS indicated that the labour market continues to be quite tight based on these figures.
The context: The Reserve Bank is eager to maintain as many of the employment gains made during the pandemic as possible but is expecting joblessness to rise as rates remain restrictive to bring down inflation.
There is some disagreement among economists about the strength underpinning the labour market at the moment and how this will play out in the future unemployment rate, with job vacancies and advertisements suggesting the market perhaps isn't as solid as the official data suggests.
The RBA considers a range of indicators when making its assessment and expects joblessness to reach 4.4% by June 2025 and remain at that level for over a year. Other economists expect it to peak significantly higher.
What they said: "Although the unemployment rate increased by 0.1 percentage point in each of the past two months, the record high participation rate and near record high employment-to-population ratio shows that there continues to be a high number of people in jobs, and looking for and finding jobs," said ABS head of labour statistics Kate Lamb.
The source: Australian Bureau of Statistics media release
