The Australian Bureau of Statistics (ABS) is set to release its monthly Employment Change report on Thursday at 0:30 GMT, revealing critical insights into the nation’s labor market for December. Most economists see the Australian economy creating about 30,000 jobs in September. This boom is a clear indicator that employment conditions are finally turning around. The unemployment rate is projected to rise to 4.4%. How this increase affects the overall health of the labor market is up for debate.
Boy, did Australia’s labor market turn on a dime in November. The nation added 35,200 in part-time jobs and lost 56,500 full-time jobs. This dynamic highlights a troubling trend: a tightening labor market that has shown signs of loosening. Australia’s participation rate is expected to hold at 66.8%, up from the 66.7% in the same month last year.
Insights from the ABS Employment Report
The ABS regularly publishes an overview of trends within the Australian labor market, providing essential data that informs economic forecasts and monetary policy decisions. Market participants will be watching the next report very closely. They are especially hopeful for a continued, if modest, recovery in labor conditions.
In Australia, full-time employees typically work at least 38 hours per week. They reap all the added benefits and get a reliable income stream. Better pay Part-time jobs usually offer better hourly rates. They are transient and without many benefits, which are curves that can affect how consumers spend their money.
Valeria Bednarik, Chief Analyst at FXStreet, explained that the AUD/USD pair is approaching recent highs, the highest since October 2024. CPI had little impact on the Kiwi, which is now floating just under the 0.6800 line heading into the employment figures.
“Relevant resistance comes at 0.6830, en route to the 0.6870 price zone. Gains beyond the latter are unlikely solely because of the employment report, although the pair could rally further if risk sentiment deteriorates.” – Valeria Bednarik
Economic Implications of Employment Trends
The upcoming jobs report is especially important as it typically tracks closely with the overall economy, the state of consumer spending and inflation. A rise in agglomeration-adjusted unemployment would suggest a deceleration in labor market expansion. This apparent optimism might be hiding some deeper fissures in the Australian economy.
Market commentators have been more than a little worried about the last few months of disappointing employment numbers. Second, the projected increase in the unemployment rate should deeply worry us. Or it might mean that non-profit sectors in general are still struggling to create a stable, sustainable workforce.
A major employment surprise on the downside might cause a violent market response. Investors would be able to act in short order to the report’s conclusion. A truly dreary employment report might send the Aussie dollar tumbling against its American counterpart. Should it move down to the 0.6700 handle, buyers could enter to place bullish positions.
“An AUD slide on a dismal employment report should lead to a slide towards the 0.6700 level, where buyers will likely reappear to add longs.” – Valeria Bednarik
Anticipated Labor Market Recovery
While the last couple months of letdown in job numbers may dim the outlook, many are hopeful about a slow return to improved labor market conditions. Market watchers are hoping that the figures for December will provide a major lift for the Aussie dollar. Should they meet or exceed expectations, this support will be further bolstered against the U.S. dollar.
The Reserve Bank of Australia (RBA) has emphasized the importance of monitoring labor demand and economic activity as part of its monetary policy considerations. They’re preparing themselves for a time of change as economic conditions begin to shift. What past job growth trends looked like will be very important for influencing their decisions.
“Turning to considerations for the monetary policy decision, members highlighted three judgements that were central to their decision at this meeting: first, the extent to which aggregate demand exceeds potential supply.” – Source related to RBA