Australia's Jobless Rate Hits Five-Year High Amid Interest Rate Hopes

Australia's jobless rate unexpectedly rose to a five-year high in August, despite a solid rebound in employment numbers.

The data from the Australian Bureau of Statistics showed net employment rose 39,500 in August from July, when it fell 15,800. This exceeded market forecasts for a 20,000 increase and was driven entirely by part-time roles.

The jobless rate climbed to 4.6%, surpassing forecasts for a steady 4.5% and reaching its highest level since late 2021. The participation rate rose to 67.1%, up 0.2 percentage point, as the ABS recorded a higher proportion of people who were previously not in the labour force moving to be unemployed.

The Reserve Bank of Australia is still expected to raise interest rates next Tuesday to combat inflation. Markets imply a 95% probability that this will happen, with the RBA targeting an interest rate of 4.6%. The Australian dollar slipped another 0.3% to $0.7018, reaching a seven-week low after heavy losses overnight.