SYDNEY, July 23 (Reuters) – Australian employment surged in June while the jobless rate held steady as more people went looking for work, data showed on Thursday, a sign of resilience that supports the case for another rise in interest rates to tame inflation.
The upbeat data sent the Australian dollar up 0.3% to $0.7020 and three-year government bond futures fell 5 ticks to 95.4, the lowest since early June. Markets narrowed the odds of a fourth rate rise in August to 28%, with a move by the year end priced at 90%, up from 78% before.
Figures from the Australian Bureau of Statistics showed net employment shot up 76,300 in June from May, the largest increase since April last year. That was far above market forecasts of a 15,300 gain, with part-time jobs jumping 47,000.
The jobless rate stayed at 4.4% as expected thanks to a rise in the participation rate to a one-year high of 67.0%. Hours worked edged up 0.2%, after sliding in May.
“The very strong monthly jobs number, with a spike in the participation rate, affirms Australia’s tight labour conditions,” said Wee Khoon Chong, APAC macro strategist at BNY.
“This, along with renewed strength in oil prices and fresh uncertainty around the inflation outlook, should keep the RBA in a vigilant mode.”
The Reserve Bank of Australia has raised interest rates three times this year to 4.35% to fight inflation, fully reversing the amount of policy easing made in 2025. It also warned policy tightening might not be over as higher energy prices fed through the economy.
Consumer inflation accelerated to an annual rate of 4% in May, with an underlying measure pushing higher to 3.6%, well above a target band of 2% to 3%.
The recent re-escalation of the conflict in the Gulf is pushing oil prices higher again, and threatening to keep inflation elevated for longer. Brent crude futures stormed back above $95 a barrel, with markets abandoning bets for policy easing in the second half of next year.
(Reporting by Stella Qiu and Wayne Cole; Editing by Jacqueline Wong and Shri Navaratnam)
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