Australian Labour Market Expected to Rebound in August

Australia's August labour force data is expected to show employment rebounding from a surprise decline in July, according to forecasts. The Reserve Bank of Australia meets on September 28-29, and markets widely expect it to raise its cash rate from 4.35%. A solid result would reinforce the view that the labour market remains resilient enough to absorb tighter policy.

The market expects employment to have risen by about 20,000 in August, with forecasts ranging from 10,000 to 47,000. Westpac is more optimistic than the consensus, pencilling in a gain of 30,000. The unemployment rate is expected to hold at 4.5%, with forecasts between 4.4% and 4.5%.

The July employment result was below market expectations, falling by about 16,000 after strong gains of 38,000 in May and 80,000 in June. The July unemployment rate edged up from 4.43% to 4.46%, just enough to round up from 4.4% to 4.5%. Westpac assumes participation holds steady at 66.9% in August, keeping the unemployment rate at 4.5%.