SYDNEY (Reuters) -Australian employment rose only marginally in June as the jobless rate jumped to the highest since late 2021, showing perhaps the first crack in what had been an unusually resilient labour market that adds to the case for a rate cut next month.
Investors sent the Australian dollar down 0.5% to $0.6493, while three-year bond futures rallied 9 ticks to 95.57. Swaps now imply a 83% probability for a cut in interest rates next month, up from 76% before the data.
Figures from the Australian Bureau of Statistics out on Thursday showed net employment rose 2,000 in June from May, when it fell by an upwardly revised 1,100. That was well short of market forecasts for a 20,000 increase, though the series has been volatile in recent months.
Most importantly, the jobless rate popped up to 4.3%, from 4.1%, the highest since November 2021 and a jolt after months of stable readings.
The labour market had proven unexpectedly resilient even as the economy overall barely grew. That was a reason that the RBA shocked markets earlier this month and held interest rates steady at 3.85%, having cut them twice this year.
The central bank was expecting the unemployment rate to peak at 4.3% this cycle.
Thursday’s report showed Full-time jobs dropped 38,200 in June, while hours worked fell back 0.9% after a sharp rise in May. The participation rate ticked up to 67.1%.
(Reporting by Stella Qiu Wayne Cole; Editing by Muralikumar Anantharaman and Michael Perry)
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