Higher Australian Unemployment Rate Increases Chance of July RBA Rate Cut
The data indicates that last month’s election failed to revive the jobs market, while risk events such as global politics and the escalating trade dispute between the United States and China continued to weigh on the economy.
The Australian Dollar fell in response to Thursday’s mixed Employment Change and Unemployment Change reports. Although the headline number blew away the forecasts, the unemployment rate rose and this is likely to raise concerns at the Reserve Bank of Australia (RBA), solidifying the need for a second rate cut.
The data indicates that last month’s election failed to revive the jobs market, while risk events such as global politics and the escalating trade dispute between the United States and China continued to weigh on the economy.
According to the data, Australia’s May employment report was mixed with the headline employment change showing the economy added 42.3K jobs last month, up from the previously reported 28.4K. Traders were looking for an increase of 17.5K.
The headline unemployment rate rose to 5.2%, higher than the 5.1% forecast.
The participation rate jumped to 66.0% from the 65.8% expected and prior number.
Rise in Unemployment Rate RBA’s Main Concern
The worsening jobless rate is likely to shake up RBA policymakers and bring the prospect of an RBA rate cut back into view as soon as July.
