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Australia’s jobless rate fell to 3.6% in September despite 40,000 full-time jobs being shed

Australia’s jobless rate fell to 3.6% in September despite 40,000 full-time jobs being shed

Australia’s jobless rate fell last month even as employers shed almost 40,000 full-time positions, sending mixed signals as to the need for another Reserve Bank interest rate rise to cool the economy.

The unemployment rate was 3.6% in September compared with a reported 3.7% in August, the Australian Bureau of Statistics said on Thursday. Economists had forecast the jobless level would remain unchanged at 3.7%.

The economy added a net 6,600 jobs, although employers reduced full-time positions by 39,900. Consensus forecasts had predicted the workforce would swell by 20,000 jobs.

The swing factor was the drop in the participation rate, easing 0.2 percentage points to 66.7% from record levels. Hours worked also contracted to 1.93bn.

“The fall in the unemployment rate in September mainly reflected a higher proportion of people moving from being unemployed to not being in the labour force,” Kate Lamb, the bureau’s head of labour statistics, said.

“Looking over the past two months, average monthly employment growth was 35,000 people, around the average growth we’ve seen in the past year.”

The RBA has left its key interest rate unchanged for four months as it assesses whether the record run of 12 rate increases between May 2022 and June this year are enough to quell inflation.

According to its estimates in August, inflation will return to the bank’s preferred 2-3% by June 2025. The central bank has also tipped the jobless rate rising to 4% by the end of 2023 although it will release revised estimates on 10 November.

The immediate market reaction was a slide in the Australian dollar to 63.2 US cents from above 63.3. Stocks were holding on to losses for the day of about 1.4%.

“The recent softening in hours worked, relative to employment growth, may suggest an easing in labour market strength, though it also follows particularly strong growth over the past year,” Lamb said.

With 400,000 job vacancies as of August, the labour market remained “relatively tight and resilient”, she said.

Among the states, New South Wales and Western Australia had the lowest unemployment rate at 3.3%, with the former dropping from 3.6% in August and the latter down sharply from 3.8%. Queensland also improved from 4.1% to 3.9% with Victoria steady at 3.5%.

The Australian Capital Territory lost its nation-leading status, with the jobless rate climbing from 3.1% to 3.9%, seasonally adjusted.

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