Australia's job market experienced a significant rebound in August, surpassing market expectations by adding an impressive 64,900 jobs to the economy. This surge in employment growth is expected to dampen views that the Reserve Bank of Australia will refrain from further interest rate hikes.
According to the Australian Bureau of Statistics, the unemployment rate remained steady at 3.7% in August, despite an increase in labor force participation during the month.
The recovery in job growth is particularly noteworthy as it includes the addition of 62,100 part-time jobs. This positive momentum helps reverse a recent slowdown in the job market, which saw the unemployment rate rise from approximately 3.5% earlier this year.
The Reserve Bank of Australia has recently emphasized its close scrutiny of inflation and jobs data when making interest rate decisions. Therefore, Thursday's robust employment figures are likely to bolster the case for at least one more rate hike before the year's end.
The substantial increase in employment seen in August followed a minor drop in July, which coincided with the school-holiday period, as reported by the ABS.
Over the past two months, monthly employment growth averaged around 32,000 individuals, similar to the average growth observed throughout the previous year.
In addition to the strong job creation, the participation rate reached a record high of 67.0% in August. However, monthly hours worked experienced a slight decline of 0.5% during the same period.
The underemployment rate also saw a modest increase of 0.2 percentage points to 6.6% in August, representing a 0.6 percentage point rise compared to the same month in 2022. Nevertheless, it remains around 2.2 percentage points lower than pre-pandemic levels, as noted by the ABS.