The Australian economy is about to release its final monthly employment report for the year, December’s. Analysts are calling for a blockbuster 30,000 new jobs. The Australian Bureau of Statistics (ABS) is set to release the report on Thursday at 0:30 GMT, amid forecasts predicting a slight uptick in the unemployment rate to 4.4%. One of the most closely followed recent developments in the labor market is … Or, at best, they expect conditions to improve slowly and modestly.
In November, the labor market experienced a mixed performance, with a notable gain of 35,200 part-time positions. This was completely offset by a significant net loss of 56,500 full-time jobs. Now, the Australian economy—which has famously weathered the storm of the global financial crisis—finds itself in a very serious bind. It wrestles with an increasingly tightening labor market and fear of losing jobs. The labor force participation rate holds steady at 66.8%, just above 66.7% a month earlier.
Employment Trends and Dynamics
The ABS has made it a regular habit to present insights into the trends impacts on employment to Australia. Their monthly Employment Change report breaks down changes in full and part-time jobs. For full-time jobs, that’s typically defined as working at least 38 hours per week. Beyond the numbers, they bring additional perks, providing long-term, stable income for workers. On the flip side, while part-time work tends to offer higher hourly wages, it is often more precarious and comes without extra benefits.
After months of disappointing reports on the Australian labour market, the last few months are pointing to a trend towards insecurity. And closely related, there are now record part-time jobs. The drastic drop in full-time employment is a red flag that should make anybody fear for the economic bottom line.
“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, and the implications of this for the persistence of the recent pick-up in inflation; second, the outlook for growth in labour demand and economic activity; and, third, whether financial conditions were still restrictive.” – Reserve Bank of Australia
Economic Implications and Currency Movements
Europe is preparing to announce its own employment numbers. Analysts are anticipating the next report to boost the Australian Dollar (AUD) versus the American Dollar. At present, the AUD/USD pair has been trading around recent highs not seen since October 2024. Market sentiment is such that a weak employment report will send the value through to the 0.6700 level. On the downside, we spot strong resistance at 0.6830, likely triggering a jump to 0.6870 price region.
Valeria Bednarik illustrates that the AUD/USD pair reached overbought conditions. Still, she’s looking hard for any evidence of a strengthening USD. She states:
“The pair may seem overbought in the near term, but there is no reason for the USD to strengthen, and hence, slides are likely to keep attracting buyers, as long as the dismal mood persists.” – Valeria Bednarik
This analysis paints a troubling picture of Australia’s economic future. Most importantly, it demonstrates just how powerful a home employment beat can be in moving currency markets.
Future Outlook
Looking forward, participants in the markets were hopeful, but cautious of the prospect of a rebound in labor conditions. Even a modest improvement in the employment figures would go a long way toward alleviating these fears and offering consumers a much-welcomed measure of confidence. The conflicting indicators from recent data point to an ongoing struggle.
The ABS’s next employment report will be key in determining which way expectations swing, for both policy makers and investors. Like the U.S., Australia is vigorously charting its own economic course. Stakeholders from both the public and private sectors continue to watch how labor statistics will affect macroeconomic policies and market dynamics and direction.