- The Australian unemployment rate is expected to remain stable at 4.1% in May.
- Employment change is expected to register a modest 25K advance after an 89K increase in April.
- The Australian dollar should benefit from optimistic figures regardless of the feeling of the market.
The Australian Statistics Office (ABS) will publish the monthly Employment Report of May at 01:30 GMT on Thursday. The country is expected to have added 25k new jobs, while it is projected that the unemployment rate will remain stable at 4.1%. Before the announcement, the Australian dollar (AUD) retains its general strength, and the Aud/USD torque is negotiated near the maximum of 2025 in 0.6545.
The April Employment Report in Australia was optimistic, since the economy added 89K new jobs, including 59.5k full -time and 29.5k part -time.
The change of employment of ABS informs separately about full -time work already part -time. According to their definition, full -time works involve working 38 hours or more per week and generally include additional benefits, but mainly represent consistent income. On the other hand, part -time employment generally offers higher time rates but lacks consistency and benefits. For this reason, full -time works have more weight than part -time when measuring labor market health.
Australian unemployment rate is stable in May
The Australian unemployment rate is expected to remain unchanged in 4.1% in May, marking a third consecutive month of stability.
Employment data is relevant as they are part of the mandate of the Bank of the Reserve of Australia (RBA). The Monetary Policy Council establishes monetary policy “in a way that believes that it contributes better to both price stability and the maintenance of full employment in Australia.”
The minutes of the May meeting showed that the concerns of those responsible for policies revolved around the tariffs of the president of the United States (USA), Trump, and “how a persistent increase in commercial barriers would affect the global economy.”
As for the labor market, the Council observed that it had remained in line with the previous forecasts. “The unemployment rate has been around 4.1 percent since mid -2024, while the underemployment rate has decreased a bit during that period.” Employment had recovered from the surprising fall recorded in February, “shows the document.
Apart from that, some policy managers questioned whether this could see a slower salary growth than is currently expected.
Meanwhile, recent data showed that salary growth in the country has increased to 3.4% in the year until March, marking the first time that salary growth has increased since the quarter of June 2024. Salaries grew 0.9% in quarterly terms in the first quarter of 2025, compared to 0.7% recorded in the anterior quarter, according to the ABS.
In general terms, it is expected that the next Australian employment report, if the result coincides with expectations, will have a limited impact on the Australian dollar (AUD), since it is unlikely to affect future monetary policy decisions of the RBA. The Central Bank has another meeting scheduled in July.
Finally, financial markets may not pay much attention to the data in the midst of the crisis in the Middle East. The escalation of the Iran-Israel conflict and the participation of the United States maintain speculative interest in a state of risk aversion. In addition, the lack of progress in commercial negotiations adds to the bleak feeling.
When will the Australian Employment Report be published and how could you affect AUD/USD?
The ABS will publish the Employment Employment Report on Thursday. As mentioned above, Australia is expected to have added 25k new jobs in the month, while the unemployment rate is expected in 4.1%. Finally, the participation rate is expected to be maintained at 67.1%.
A better employment report than anticipated will probably drive the AU, even if the most significant increase comes from part -time jobs. However, the advance could be more sustainable if the increase comes from full -time positions. The opposite scenario is also valid, with weak figures weighing on the Australian currency.
Valeria Bednarik, chief analyst of FXSTERET, points out: “The aud/USD torque is negotiated about a recent 2025 in 0.6552, while registering higher maximums weekly, keeping alive the dominant upward trend. Given concerns about the economic progress of the US Be under pressure.
Bednarik adds: “An optimistic employment report, on the other hand, can push the aud/USD to new maximums of 2025, with the 0.6600 threshold in sight.”
FAQS EMPLOYMENT
The conditions of the labor market are a key element to evaluate the health of an economy and, therefore, a key factor for the assessment of currencies. A high level of employment, or a low level of unemployment, has positive implications for consumer spending and, therefore, for economic growth, which drives the value of the local currency. On the other hand, a very adjusted labor market – a situation in which there is a shortage of workers to cover vacancies – can also have implications in inflation levels and, therefore, in monetary policy, since a low labor supply and high demand lead to higher wages.
The rhythm to which salaries grow in an economy is key to political leaders. A high salary growth means that households have more money to spend, which usually translates into increases in consumer goods. Unlike other more volatile inflation sources, such as energy prices, salary growth is considered a key component of the underlying and persistent inflation, since it is unlikely that salary increases will fall apart. Central banks around the world pay close attention to salary growth data when deciding their monetary policy.
The weight that each central bank assigns to the conditions of the labor market depends on its objectives. Some central banks have explicitly related mandates to the labor market beyond controlling inflation levels. The United States Federal Reserve (Fed), for example, has the double mandate to promote maximum employment and stable prices. Meanwhile, the only mandate of the European Central Bank (ECB) is to maintain inflation under control. Even so, and despite the mandates they have, labor market conditions are an important factor for the authorities given its importance as an indicator of the health of the economy and its direct relationship with inflation.
RBA FAQS
The Bank of the Australian Reserve (RBA) sets interest rates and manages Australia’s monetary policy. The decisions are made by a advice of governors in 11 meetings per year and in the necessary emergency meetings that are necessary. The main mandate of the RBA is to maintain price stability, which means an inflation rate of 2%-3%, but also “… contribute to the stability of currency, full employment and economic prosperity and the well-being of the Australian people.” Its main tool to achieve this is to raise or lower interest rates. Relatively high interest rates will strengthen the Australian dollar (AUD) and vice versa. Other RBA tools are the quantitative relaxation and hardening of monetary policy.
Although traditionally it has always been considered that inflation is a negative factor for currencies, since it reduces the value of money in general, the truth is that in modern times the opposite has happened with the relaxation of cross -border capital controls. Moderately high inflation now tends to take the central banks to raise their interest rates, which in turn has the effect of attracting more capital of world investors who are looking for a lucrative place to keep their money. This increases the demand for the local currency, which in the case of Australia is the Australian dollar.
Macroeconomic data calibrates the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in safe and growing economies than in precarious and contraction economies. A greater influx of capital increases aggregate demand and the value of the national currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment and surveys about consumer feeling can influence the AUD. A strong economy can encourage the Bank of the Australian Reserve to raise interest rates, also supporting the Aud.
The quantitative easing (QE) is a tool used in extreme situations in which to lower interest rates is not enough to restore credit flow in the economy. The QE is the process by which the Bank of the Australian Reserve (RBA) prints Australian dollars (AUD) in order to buy assets – normally State or business bonds – to financial institutions, thus providing them with the liquidity they need so much. The one usually translates into a weaker audience.
The quantitative hardening (QT) is the reverse of the QE. It is carried out after the QE, when economic recovery is underway and inflation begins to increase. While in the QE the Bank of the Australian Reserve (RBA) buys state and business bonds from financial institutions to provide liquidity, in QT the RBA stops buying more active and stops reinvesting the main one that expires of the bonds it already has. It would be positive (or bullish) for the Australian dollar.
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.
