Australia’s Unemployment Rate rose to 4.2% in July, compared with the expectations and the previous figure of 4.1%, according to the official data released by the Australian Bureau of Statistics (ABS) on Thursday.
Furthermore, the Australian Employment Change arrived at 58.2K in July from 50.2K in June, compared with the consensus forecast of 20.0K.
The participation rate in Australia increased to 67.1% in July, compared to 66.9% in June. Meanwhile, Full-Time Employment increased by 60.5K in the same period from 43.3K in the previous reading. The Part-Time Employment decreased by 2.3K in July versus 6.8K prior.
AUD/USD reaction to the Australia Employment report
The Australian Dollar edges higher in an immediate reaction to the mixed Australia Employment report. The AUD/USD pair is trading at 0.6595, down 0.06% on the day.
Employment FAQs
Labor market conditions are a key element in assessing the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels because low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given their significance as a gauge of the health of the economy and their direct relationship to inflation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD clings to gains near 1.2850 after UK data
GBP/USD regains positive traction and trades at around 1.2850 in the European morning on Thursday. The data from the UK showed that the GDP expanded at an annual rate of 0.9% in Q2 as expected, helping Pound Sterling stay resilient against its peers.
EUR/USD holds steady above 1.1000 ahead of US Retail Sales data
The EUR/USD pair consolidates its gains near 1.1010 after retracing from the fresh seven-month top during the early European session on Thursday. The Eurozone Gross Domestic Product growth figure for the Q2 printed exactly as expected, which lifted the Euro against the Greenback.
Gold: $2,470 appears a tough nut to crack for buyers
Gold price has managed to find its feet above the $2,450 psychological level, looking once again to challenge the $2,470 key resistance in the lead-up to the US Retail Sales and Jobless Claims data releases.
Ethereum price is poised for a decline as on-chain data shows negative bias
Ethereum's price is set for a downturn as it approaches its key resistance area of around $2,843. On-chain data further supports a bearish outlook, highlighted by a positive spike in Ethereum's Exchange Flow Balance and a decline in development activity.
Feeding off a diet of calming disinflation
As the sun rises over Asia, the markets calmly grab the baton from a relatively serene US scene. The current buzz isn't about whether the Fed will trim rates at its spotlight-stealing September 17-18 gathering but how deep they'll dig into the cuts.