Australia’s labor market cooled slightly last month, with only about 16,000 new jobs created in October, fewer than analysts had expected, according to the Bloomberg consensus. At the same time, the unemployment rate remained unchanged at 4.1%, but only because the participation rate fell slightly from 67.2 to 67.1%, notes Commerzbank FX analyst Volkmar Baur.
AUD to weaken in coming months
“Despite the slowdown, the level at which the labor market operates remains very robust. The number of new jobs created has fallen below the pre-pandemic average of around 22,000, but you should not read too much into a single figure. The three-month average remains above 40,000 new jobs.”
“And unemployment, at 4.1%, remains well below pre-pandemic levels, with the participation rate continuing to be very high. The unemployment rate for young people aged 15-19, who tend to be more sensitive to the cycle economic has even fallen to its lowest level in a year.”
“The Reserve Bank of Australia should feel vindicated in its hawkish stance earlier this month when it left the interest rate unchanged at 4.35%. The market continues to have a similar view, anticipating the first rate cut only in the middle of next year. “In my opinion, the risk is therefore more towards an earlier economic slowdown and a faster rate cut. Therefore, the AUD should tend to weaken in the coming months.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
