Australia's Jobless Rate Hits Five-Year High Amid Inflation Fears
Australia's jobless rate unexpectedly rose to a five-year high in August, reaching 4.6% according to data from the Australian Bureau of Statistics (ABS). This marks the highest level since late 2021, with the participation rate climbing to 67.1%, up 0.2 percentage point. The increase was driven by part-time roles, which rose by 39,500 in August from July, exceeding market forecasts for a 20,000 increase.
Despite this, markets still predict an imminent interest rate hike to combat inflation, with a 95% probability of the Reserve Bank of Australia (RBA) raising rates next Tuesday to 4.6%. The Australian dollar, however, slipped another 0.3% to $0.7018, a seven-week low.
Oscar Guth, economist for Oxford Economics Australia, said that while employment growth failed to keep pace with the influx of people into the labour force in August, 'inflation pressures extend well beyond the labour market' and are driven by factors such as oil prices above $100 a barrel. Guth expects the RBA to hike rates next Tuesday.