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Australia's unemployment rate rises despite job growth
Australia's labour market delivered a mixed bag of results in July, with unemployment ticking up despite stronger-than-expected job growth. As the Reserve Bank of Australia keeps a close eye on these numbers, the outlook for interest rates and economic stability remains in focus. Australia's unemployment rate increased to 4.2% in July, up from 4.1% in June. This is the highest rate since January 2022, despite the addition of 58,200 jobs. Economists had expected the rate to remain stable at 4.1%. Employers added 58,200 jobs in July, with 60,500 full-time positions created and 2,300 part-time jobs lost. This job growth was nearly three times what economists had predicted. The participation rate reached a record high of 67.1%, indicating a strong labour supply. The Reserve Bank of Australia, or RBA, is monitoring the labour market closely as it weighs future interest rate decisions. The unemployment rate's rise aligns with the RBA's expectation of reaching 4.3% by December, a level near full employment. Market predictions for a rate cut have now become less certain. Despite the unemployment uptick, the labour market remains tight, with 637,000 people unemployed in July. Wage growth has slowed, and job vacancies have declined by 3.7%, reflecting a cooling but resilient job market. The Australian dollar slightly strengthened, while stock market gains were pared back.
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