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Australia's Unemployment Rate Forecast to Fall to 4.4% in May, BofA Securities Says

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Australia's unemployment rate is expected to fall to 4.4% in May, as employment rises by 35,000 and Easter-driven weakness in April unwinds, BofA Securities predicted in a report on Wednesday.

The "surprisingly weak" April data is believed to largely reflect abnormal seasonality associated with the Easter holiday and youth employment, falling 56,000 in April, with a 0.9 percentage point rise in the unemployment rate. As these effects unwind in May, employment should rebound and the unemployment rate edge lower.

Overall, signals suggest labor demand remains resilient, consistent with a near-term rebound in employment and only a gradual rise in the unemployment rate through the second half. Concerns around artificial intelligence reducing the number of new job openings are not supported by current trends. Job listings remain broadly stable through the year, and graduate hiring is running above pre-pandemic levels.

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