May 2023 saw significant growth in employment in Australia, with a whopping 75.9k new jobs added – far surpassing the predicted 17.5k.
This surge has positive implications for the economy, particularly consumer spending. The Australian dollar is on the rise, with a bullish outlook.
Key Statistics at a Glance
- Unemployment rate remains steady at 3.5% in trend terms
- Participation rate unchanged at 66.8%
- Employment increased to 14,003,400 in trend terms
- Underemployment rate increased to 6.3%
- Full-time employment increased by 61,700 people to a total of 9,826,200
- Part-time employment increased by 14,300 people to a total of 4,185,600
In May 2023, unemployment decreased to 3.6% in seasonally adjusted terms, while the participation rate increased to 66.9%. Overall, these numbers signal a strong job market and a promising outlook for Australia’s economy.
Despite upbeat monthly Retail Sales data in the United States, the AUD/USD pair continues to hold strong near 0.6800.
While American economic data grew by 0.3% against the expected contraction of 0.1%, the pace of expansion has slowed compared to prior numbers.
This implies resiliency in US household demand and explains why the Federal Reserve (Fed) has delivered hawkish interest rate guidance.
The US Dollar Index has seen a significant sell-off aside from a brief pullback near 103.27, with more predicted to come.
The neutral policy stance of Fed chair Jerome Powell has yet to be considered, and 10-year US Treasury yields have plummeted to nearly 3.8%.
S&P500 futures continue to decline amid fears of a recession in the US economy, intensified by Powell’s announcement that two more interest rate hikes will be declared by the end of the year.
The Fed’s top priority is to decrease inflation to 2%, which is difficult due to persistent core Consumer Price Index (CPI) numbers and tight labor markets.
Upbeat Australian Employment data expects to boost the Australian Dollar’s strength.
The Australian economy added 75.9K payrolls in May, surpassing the consensus of 15K, despite laying off 4.3K employees in the previous month. The Unemployment Rate also declined to 3.6%, less than the estimates and former release of 3.7%.
It’s essential to note that Australian inflation has risen to almost 6.8% in May. The tight labor market and inflationary pressure combination is likely to make the Reserve Bank of Australia (RBA) remain hawkish in the coming months.
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