Australia's Jobless Rate Surges Amid Inflation Fears

Australia's jobless rate unexpectedly rose to a five-year high in August despite solid employment growth, leaving markets still anticipating an imminent interest rate hike to combat inflation.

The country's unemployment rate climbed to 4.6%, exceeding forecasts for a steady 4.5% and the highest level since late 2021, according to data from the Australian Bureau of Statistics released on Thursday.

Net employment rebounded by 39,500 in August from July's decline of 15,800, driven entirely by part-time roles, but failed to keep pace with the influx of people into the labour force, which rose 67,700 in August and is up 2.1% from a year earlier.

Oxford Economics Australia economist Oscar Guth said employment growth 'failed to keep pace with the influx of people into the labor force in August, easing some of the tightness in the labor market.'

The Reserve Bank of Australia has raised interest rates three times this year to 4.35% to tame inflation, which is still running at 3.6%, well above the RBA's target range of 2-3%. Governor Michele Bullock has warned that inflation risks are materialising off the back of the Middle East conflict and a data centre investment boom.