Australia's jobless rate climbs to 4.7% as hiring slumps in September
Employment fell 39,300, reversing August's rise, two weeks after the Reserve Bank lifted its cash rate to 4.60%
Published
Australia's unemployment rate rose to 4.7% in September, above forecasts of 4.6% and up from 4.6% the month before.
Employment fell by 39,300, well short of forecasts for a 20,000 gain and a reversal of August's 39,500 increase. Full-time jobs rose 34,400 even as the overall number fell. The participation rate slipped to 66.8%, below the 67.0% expected.
The data follow a quarter-point rate rise by the Reserve Bank of Australia on September 29, which took the cash rate to 4.60%, its highest since November 2011 and the fourth hike of the year, according to the Mozo rate tracker. Minutes from that meeting, released October 13, showed the Board remained open to further increases on concerns about inflation and domestic capacity pressures, CommBank's newsroom reported. Underlying inflation ran at 3.6% in the 12 months to August, unchanged from July, according to Azura Financial. Ahead of the minutes, traders had priced roughly a one-in-three chance of another hike at the Bank's November 3 meeting, with CommBank, NAB and Westpac expecting a hold at 4.60% and ANZ forecasting a move to 4.85%, per Mozo.
The weaker jobs figures sit awkwardly with the IMF's recent call for the RBA to keep a tightening bias and with Governor Bullock's description of the labour market as close to, but a little tighter than, full employment. A jump in unemployment alongside the sharpest monthly fall in jobs this year, undoing the previous month's gain, points toward a central bank more inclined to hold than to raise rates again, particularly with consumer confidence already losing ground. It also adds to Treasurer Chalmers' concerns over higher borrowing costs weighing on the budget, reinforcing a picture of slowing momentum at home even as price pressures stay elevated.