By Stuart Condie
SYDNEY–Australia’s economy added fewer jobs in September than economists had expected, potentially easing pressure on the Reserve Bank of Australia to raise interest rates next month.
The number of employed people rose by 6,700 from August, according to data released Thursday by the Australian Bureau of Statistics. That compared with market forecasts of 20,000 additional jobs.
The unemployment rate fell to 3.6% from 3.7% but only due to the exit of some previously employed people from the workforce, the ABS said. Economists had anticipated the unemployment rate to remain steady.
“It is important to remember that a fall in unemployment does not always mean much higher employment,” said Kate Lamb, head of labor statistics at the ABS.
The RBA this week said that it was keeping a sharp lookout for any economic signals suggesting that inflation may not retreat to its 2%-3% target zone by 2025.
Minutes from the RBA’s most recent rate-setting meeting, when it held the cash rate at 4.10% for a fourth straight month, indicated that next week’s September-quarter inflation report was key to whether the central bank would resume its policy tightening.
On Thursday, Lamb said the drop in the unemployment rate suggested a still-tight labor market, albeit with signs of potential softening.
Lamb noted that monthly hours worked fell for a second straight month. The employment-to-population ratio also fell by 0.1 percentage point from August to 64.4%, its average level for the past 12 months.
“The recent softening in hours worked, relative to employment growth, may suggest an easing in labor market strength, though it also follows particularly strong growth over the past year,” Lamb said.
Employment growth dropped sharply from August, when the jobs market appeared to have exited a soft patch with the addition of 64,900 jobs, almost all of them part-time.
The economy added another 46,500 part-time jobs in September, but lost 39,900 full-time jobs.
Write to Stuart Condie at [email protected]
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