Australia’s labour market held firm in July, with employment rising by 24,500 jobs, broadly matching the 25,000 expected by economists. The unemployment rate eased to 4.2% from 4.3% in June, while the participation rate remained steady at 67%, according to the Australian Bureau of Statistics (ABS).
ABS head of labour statistics Sean Crick said: “With employment rising by 25,000 people and the number of unemployed decreasing by 10,000 people, the unemployment rate fell by 0.1 percentage points to 4.2 per cent in July.”
Growth was driven by a surge in full-time roles, up by 60,500, offset by a 35,900 fall in part-time positions. Female full-time employment rose by 40,000, while male full-time jobs increased by 20,000. Female participation hit a record 63.5%.
Tony Sycamore of IG said the details were “very much well in line with consensus expectations” and aligned with the Reserve Bank of Australia’s (RBA) view that labour market conditions remain “a little tight” but are easing. He noted market pricing for a 25 basis point rate cut in November and another in February 2026 “has changed very little post the jobs report”.
The currency market reacted modestly, with the Australian dollar up 15 pips to US$0.6565/67, supported by a softer US dollar following dovish comments from US Treasury Secretary Bessent. The ASX200 remained 62 points higher at 8,890, after earlier touching a record 8,891.3, with Sycamore projecting gains towards 9,000 “providing it remains above support at 8,630/10ish.”
Krishna Bhimavarapu of State Street Investment Management cautioned that “signs point to a potential uptick in the unemployment rate over the next year” due to rotation group trends, though the outlook still supports “continued measured monetary easing” with the cash rate forecast at 3.10% by December.
Dwyfor Evans of State Street Markets said the report “gives some credence to the view that Reserve Bank guidance on the cash rate will be one of caution” as consumer sentiment improves, adding that markets may be “a tad too aggressive on easing expectations over the medium-term.”