- Australia’s unemployment rate climbs to 5.3% in January versus 5.2% expected.
- 13,500 new jobs were added in January with the participation rate posting at 66.1%.
- Callam Pickering of Indeed Inc. says Thursday's data doesn't account for the potential impact of Coronavirus.
- AUD/USD dropped to its lowest in almost a decade following the release of the economic data.
The Australian Bureau of Statistics announced the unemployment rate to have unexpectedly surged in January despite an increase in full-time employment.
As per Thursday’s data, unemployment climbed to 5.3% in January versus a 5.2% anticipated by economists. The data also highlighted 13,500 new jobs to have been added to the Australian market in January with the participation rate posting at 66.1%. On both these fronts, January’s readings beat the previously announced forecasts.
Callam Pickering’s Comments On Thursday’s Economic Data
According to Callam Pickering of Indeed Inc., the Australian job market has not welcomed the new year on a positive note. He further added that January’s data doesn’t account for the potential impact of the recent outbreak of Coronavirus in China. If the health emergency persists, Pickering commented, the unemployment rate can be expected to surge even higher in Australia in the upcoming months.
The pessimism of Thursday’s data weighed heavily on the Australian dollar in the forex market that lost traction immediately after the release of the data. From a daily high of around 0.6680 against the greenback, it was last seen trading at 0.6625. On the other hand, sovereign bond yield (three year) lost 2 basis points on Thursday and was recorded at 0.69%.
Employment remained strong for almost three years in Australia and held its ground through the periods of high volatility, both offshore and domestic. But the job market still couldn’t push the wages higher while containing unemployment at a low level in Australia. Such an economic scenario laid the foundation for three rate cuts by the Reserve Bank of Australia in 2019 that were directed at improving investments, providing stimulus for growth and hit the central bank’s annual inflation target.
Other Noticeable Figures Included In Thursday’s Data
Other noticeable figures in Thursday’s economic data included an additional 46,200 full-time jobs and a decline of 32,700 part-time jobs in January. Underemployment, on the other hand, was recorded at 8.6% last month that marked a 0.3 percentage point of increase. Monthly hours worked were reported at 8.1 million that translated to a 0.4% decline in January.
According to the experts, Thursday’s data was not significantly impacted by the bushfires on the east coast of Australia. At around 0.6625, the Aussie dollar currently marks its lowest against the U.S dollar in almost a decade.
In its economic forecast for the quarter, the RBA had anticipated unemployment to keep around 5.25% in the first half of 2020. Wage growth, as per RBA, is to stabilize around 2.2% in the same time period.