ABS reports 58,000 new jobs in July labour force data

The latest employment figures beat expectations, with the Australian economy adding tens of thousands of new jobs.

The Australian economy added 58,000 new jobs in July, far outstripping estimates of a 20,000 increase, though unemployment ticked up to 4.2 per cent in a mixed labour force landscape that could complicate the trajectory of interest rates in Australia.

The number of unemployed grew by 24,000 people and employed by about 58,000 across the month, ABS head of labour statistics Kate Lamb said on Thursday, with the participation rate lifting to 67.1 per cent.

“The employment-to-population ratio rose by 0.1 percentage point to 64.3 per cent, indicating employment growth was faster than population growth and was just below the historical high of 64.4 per cent in November 2023,” she said.

“Although the unemployment rate increased by 0.1 percentage point in each of the past two months, the record high participation rate and near record high employment-to-population ratio shows that there continues to be a high number of people in jobs and looking for and finding jobs.

“While unemployment increased to 637,000 people in July, the highest it has been since November 2021, it remains around 70,000 people below its pre-pandemic level.”

The ABS reported a record high employment-to-population ratio on Thursday. Picture: NewsWire / Luis Enrique Ascui

The 58,000 new jobs adds to the 50,000 jobs gained in June.

The numbers could complicate the direction of interest rates in Australia, IG markets analyst Tony Sycamore said, as the Reserve Bank of Australia watches for declines in price pressures in the economy.

“Today’s numbers confirm that the labour market remains tight and is cooling more gradually than many had expected,” he said.

“However, with the participation rate or supply rising to a record level, it will allow the RBA more time to keep rates on hold and watch how the data develops.”

The rates market repriced its expectations for rate cuts in response to the numbers, Mr Sycamore added, with a 29 basis point cut before year-end readjusted to 22 basis points.

Reserve Bank of Australia Governor Michele Bullock. Economist Sean Langcake called the July jobs report a ‘relatively benign’ one for the RBA. Picture: NewsWire / John Appleyard

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake called the jobs data a “relatively benign” for the RBA.

“Their goal of keeping the labour market close to full employment is succeeding, with the economy continuing to add jobs at a steady pace,” he said.

“Concurrently, demand and supply are coming into better alignment, with the market slackening gradually.

“We continue to expect rates will be on hold through 2024, with the first cut not coming until Q2 next year.”

Mr Lang also said he expected unemployment to graducally tick up to 4.5 per cent by the end of the year.

“Although headcount is increasing at a fast pace, the labour market is gradually slackening,” he said.

“The unemployment rate has now risen by half a percentage point over the past year and we expect a further drift upward to around 4.5 per cent over the rest of 2024.”

The ABS will deliver its next consumer price index indicator on August 28, with retail sales following on August 30 and the second quarter GDP growth numbers on September 4.

Originally published as ABS reports 58,000 new jobs in July labour force data