International
Australia's June Labor Data Delivered Upside Surprise; Further Rate Hikes Still a Possibility, ANZ Says
Headline data from Australia's June labor force survey surprised on the upside, with a "strong" 76,300 increase in employed people exceeding market forecasts for a rise of 15,000, ANZ said in a Thursday report.The participation rate rose to 67% in June from 66.7% in the previous month to hit the highest level since July last year. Meanwhile, the offsetting effects of stronger employment and labor supply kept the unemployment rate unchanged at 4.4%, above the Australian central bank's latest forecast of 4.2%.However, the latest data likely has some statistical noise as the the Australian Bureau of Statistics (ABS) noted that one of the incoming rotation groups in New South Wales and Victoria was significantly different in its labor force characteristics."As such, we think the key takeaway from the release is the steady unemployment rate, which provides a better signal of underlying labor market conditions than the headline employment gain," ANZ said.The Reserve Bank of Australia (RBA) will likely acknowledge that labor market conditions have eased more than expected, and could also revise its unemployment forecast upward in its next policy statement in August, ANZ said.It added that the latest labor data "is unlikely to be a source of concern that would prevent additional policy tightening."
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