Australia jobs surge past expectations in June, labor market remains tight

Investing.com-- Australia’s job market grew more than expected in June, as high vacancies and a strong amount of participation saw the labor market running hot even as unemployment rose slightly. 

The total number of employed people grew by 50,200 people in June, data from the Australian Bureau of Statistics showed on Thursday. The increase was much higher than expectations for a rise of 19,900, and picked up pace from 39,700 seen in the prior month.

The outsized increase saw Australia’s participation rate- which gauges the percentage of the working-age population that is in the workforce- rise to 66.9% in June from 66.8% in the prior month, while the unemployment rate rose slightly to 4.1% from 4%. 

“The labour market remains relatively tight, despite the unemployment rate being above 4.0 per cent since April,” Bjorn Jarvis, ABS head of labour statistics said in a statement, noting that a high participation rate and increased vacancies were the main factors of a tighter market. 

A tighter labor market indicates that at least some facets of Australia’s economy are running strong, even as high interest rates and sticky inflation weighed on consumer spending and business activity. 

A strong labor market also gives the Reserve Bank of Australia more headroom to keep interest rates higher for longer, and, coupled with a recent bout of sticky inflation, could even see the bank raise interest rates further.