Australia’s labor market showed steady strength in July, with the unemployment rate edging down to 4.2% from 4.3% in June, according to Thursday’s data from the Australian Bureau of Statistics.
The employment data comes just two days after the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points to 3.6%. RBA Governor Michele Bullock had indicated that while the labor market has eased in recent months, some indicators suggest conditions remain “a little bit on the tight side.”
Key Points from the July Employment Report
- Unemployment rate: Fell to 4.2% (seasonally adjusted) from 4.3% in June
- Employment growth: Added 24,500 jobs, matching market expectations
- Full-time employment: Surged by 60,500 positions
- Part-time employment: Declined by 35,900 jobs
- Participation rate: Remained steady at 67.0%
- Monthly hours worked: Increased by 0.3% to 1,987 million hours
Link to official ABS Australia Labour Force Report
The shift toward full-time employment contrasts sharply with June’s weak showing, when only 1,000 jobs were added amid concerns about deteriorating labor conditions.
The surge of 60,500 full-time positions signaled robust labor market health and reduced the likelihood of a September RBA rate cut, with markets now eyeing November as more probable timing for further easing.
Market Reactions
Australian Dollar vs. Major Currencies: 5-min
Overlay of AUD vs. Major Currencies Chart by TradingView
The Australian dollar popped higher right after the jobs report hit, with AUD/USD climbing about 30 pips from 0.6540 to just under 0.6570 in the first half hour. It held onto those gains through the Asian session, mostly drifting sideways in the 0.6560 to 0.6570 zone while flexing against most major currencies.
Traders were clearly relieved after June’s weak 1,000 job print was replaced with a much stronger 24,500 gain. That, along with record female workforce participation and a softer US dollar on talk of possible 50-basis-point Fed cuts from Treasury Secretary Bessent, kept the Aussie supported.
About an hour in, AUD started to slip a bit as traders possibly braced for today’s upcoming US PPI and jobless claims releases. Even so, the Aussie is still in positive territory across the board except against the relatively stronger Japanese yen.
