Australia's unemployment rate is projected to rise slightly from 3.9% to 4.0% in December, marking a critical juncture for the nation's economic landscape as the hiring pace decelerates. This anticipated change comes amid expectations that the country will add approximately 15,000 new job positions during the month. The participation rate is likely to remain steady at 67%, reflecting ongoing engagement in the labor market despite the slight uptick in unemployment.
The Australian Bureau of Statistics (ABS) is scheduled to release the December monthly employment report at 00:30 GMT on Thursday. This report, however, will not encompass data on wage growth. The unemployment rate had previously oscillated between 4% and 4.2% from April to September 2024, with a dip to 3.9% in November serving as a positive surprise for analysts and policymakers.
In November, Australia saw the creation of 35.6K new job positions, comprising a significant increase of 52.6K full-time roles and a reduction of 17K part-time positions. This shift underscores the evolving dynamics within the labor market, where full-time employment appears to be favored over part-time work.
The Reserve Bank of Australia (RBA) has opted to maintain the cash rate target at 4.35%, a decision consistent with its stable inflation forecast. Despite this, the RBA acknowledges that price pressures are unlikely to decrease substantially within the target range until 2026. The latest quarterly report indicated an annualized Wage Price Index at 3.5%, surpassing the desired midpoint of 2.5%.
The AUD/USD currency pair remains a focal point for economic observers, trading around the 0.6200 mark, which is close to an almost four-year low of 0.6130.
“The current AUD/USD advance seems corrective, given the USD extreme overbought conditions. Caution ahead of Trump’s government favors demand for safe-haven assets.” – Valeria Bednarik, Chief Analyst at FXStreet
A critical resistance level looms at 0.6301, which was the January 1st top, while the 20 Simple Moving Average (SMA) provides a near-term dynamic resistance at approximately 0.6220.
“From a technical point of view, AUD/USD could soon resume its decline. The daily chart shows that it is up for a third consecutive day, yet still below all its moving averages. A firmly bearish 20 Simple Moving Average (SMA) provides near-term dynamic resistance at around 0.6220.” – Valeria Bednarik, Chief Analyst at FXStreet
“A critical resistance comes at 0.6301, January 1st top. Sellers will likely reappear around it, should strong employment figures push it higher. The immediate support, on the other hand, is the January 14 low at 0.6160, followed by the mentioned 0.6130 low. A break below the latter exposes the psychological 0.6000 mark.” – Valeria Bednarik, Chief Analyst at FXStreet
The Australian labor market remains robust, with record-high participation rates and stabilized average working hours. This resilience is further evidenced by declining cyclical measures such as youth unemployment and underemployment.
“The unemployment rate was 4.1% in September, up from the trough of 3.5% in late 2022. But the participation rate remains at record highs, vacancies are still elevated and average hours worked have stabilised. At the same time, some cyclical measures of the labour market including youth unemployment and underemployment have recently declined,” – monetary policy meeting statement