Australian Shares Trim Declines Despite Higher Unemployment Rate

Australian shares pared losses on Thursday after data showed the unemployment rate rose more than expected. The S&P/ASX 200 index fell as much as 1.4% earlier in the session but recovered to a decline of just 0.8%. The jobless rate rose to a five-year high of 4.6%, above forecasts for a steady 4.5% climb.

Data from the Australian Bureau of Statistics showed net employment rose 39,500 in August from July, exceeding market expectations for a 20,000 increase. Reserve Bank of Australia Governor Michele Bullock said unemployment between 4.5% and 5.0% could help restrain inflation.

Investors continued to price in a 25-basis-point rate increase at the central bank's September 28-29 meeting, unchanged by the data. BHP and Rio Tinto fell 2.1% and 0.7%, respectively, while resources stocks dropped 1.8%. Financials slipped 0.9%, with all four major banks declining between 1.1% and 1.7%

Rate-sensitive real estate and consumer staples stocks lost 1.5% and 0.3%, respectively. Energy was one of the few sectors trading in positive territory, advancing 1% after a sharp rally in oil prices overnight.