Australia unemployment rate expected to remain unchanged at 4.2% in August
- The Australian Unemployment Rate is forecast to remain unchanged at 4.2% in August.
- Australia is expected to have added 22,000 new positions in the month, following the 24,500 added in July.
- AUD/USD aims to extend gains beyond the 0.6700 mark ahead of the announcement.
Australia will release its August monthly employment report on Thursday at 1:30 GMT, and market participants anticipate yet another month of moderate growth in the labor market.
The Australian Bureau of Statistics (ABS) is expected to announce that the country added 22,000 new job positions in the month, while the Unemployment Rate is forecast to remain stable at 4.2%. The Participation Rate is also expected to remain unchanged at 67%.
Australian ABS reports both full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs imply working 38 hours per week or more, usually include additional benefits and they mostly represent consistent income. On the other hand, part-time employment generally means higher hourly rates but lacks consistency and benefits. That’s why the economy prefers full-time jobs.
Australian unemployment rate expected to remain unchanged in August
Employment figures are crucial in terms of monetary policy, as most central banks base their decisions on labor conditions and inflation levels. The Reserve Bank of Australia (RBA) is no exception. Policymakers met early in August, and the Board decided to lower the Official Cash Rate (OCR) by 25 basis points (bps) to 3.6% from 3.85%, explaining that, on the one hand, inflation has continued to moderate, while on the other hand, “labor market conditions have eased further in recent months.”
Indeed, recent employment-related data has been on the disappointing end, as data from the last few months have been quite soft. The economy lost 1,100 positions in May, added 1,000 in June, and gained an additional 24,500 in July, far below the 87,600 reported in April.
A loosening labour market is generally understood as negative for the economy, but it also means the central bank has no reason to keep interest rates at high levels. Most central banks have claimed that the strength of the sector has somehow limited their ability to further lower interest rates, and Australia is no exception.
Following the RBA’s announcement, the central bank released the Minutes of such a meeting, which showed the Board judged some “further reduction in the cash rate likely needed over the coming year,” while adding that incoming data would determine the pace of rate cuts. Policymakers also noted that the labor market remained a little tight, inflation was still above the midpoint, and domestic demand was recovering.
Other than that, it is worth remembering that Australia's wage inflation is reported separately from the monthly employment data every quarter. According to the latest data available, the wage price index grew 3.4% on a yearly basis in the second quarter of 2025, the same rate of increase as seen in the three months to March, and slightly above the 3.3% anticipated. However, on a quarterly basis, the wage price index rose 0.8% in Q2, easing from the previous 0.9% and matching expectations.
With that in mind, the upcoming employment report will be read on how it could impact the upcoming RBA’s decisions. Stronger-than-anticipated job creation could boost demand for the Australian Dollar (AUD) as it would not only be positive for the economy, but also delay future interest rate cuts.
A weak employment report, on the other hand, should weigh the Aussie lower and leave the door open for additional cuts in the foreseeable future.
When will the Australian employment report be released and how could it affect AUD/USD?
The ABS August report will be released early on Thursday. As previously noted, the Australian economy is expected to have added 22,000 new job positions in the month, while the Unemployment Rate is foreseen at 4.2% and the Participation Rate at 67%.
In addition, the Federal Reserve (Fed) announced its decision on monetary policy following a two-day meeting. The central bank cut the benchmark interest rate by 25 basis points (bps), as expected. At the same time, the Summary of Economic Projections (SEP) anticipates two additional interest rate cuts this year, in line with the market’s expectations, while confirming investors’ speculation of three rate cuts before the year's end. As a result, the US Dollar came under renewed selling pressure, helping AUD/USD extend its yearly advance.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair hit a fresh 2025 high of 0.6707 ahead of the release of employment data, but changed course afterwards. The near-term picture is bearish, with the 4-hour chart showing the pair piercing a bullish 20 Simple Moving Average (SMA) currently in the 0.6660 price zone. A firm recovery above the level should see the pair retesting the aforementioned yearly high ahead of the 0.6730 price zone."
Bednarik adds: “The AUD/USD pair could ease further once below the initial support in the 0.6630 area, with 0.6590 coming up next.”
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
Economic Indicator
Unemployment Rate s.a.
The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.
Read more.Next release: Thu Sep 18, 2025 01:30
Frequency: Monthly
Consensus: 4.2%
Previous: 4.2%
Source: Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) publishes an overview of trends in the Australian labour market, with unemployment rate a closely watched indicator. It is released about 15 days after the month end and throws light on the overall economic conditions, as it is highly correlated to consumer spending and inflation. Despite the lagging nature of the indicator, it affects the Reserve Bank of Australia’s (RBA) interest rate decisions, in turn, moving the Australian dollar. Upbeat figure tends to be AUD positive.
Artigos Recomendados
