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Investing.com-- Australian employment grew more than expected in August, data showed on Thursday, bouncing back from a small contraction in the prior month as labour conditions remained tight.
The total number of employed people in the country grew 64,900 in August, data from the Australian Bureau of Statistics (ABS) showed. The reading blew past expectations for growth of 24,300 people, and showed a strong recovery after a 14,600 contraction seen in the prior month.
Australia’s unemployment rate remained steady at 3.7%. Thursday’s reading showed that despite some cooling in July, Australia’s labour market remained largely strong, with the participation rate- which represents the number of people within working age and in the labour force- hitting a record high of 67% in the month.
“Looking over the past two months, the average employment growth was around 32,000 people per month, which is similar to the average growth over the past year,” Bjorn Jarvis, ABS head of labour statistics, said in a statement.
Jarvis also noted that the data continued to reflect a tight labour market. A shortage of skilled workers and increasing vacancies has kept employment conditions tight over the past year, and has also helped drive up wages, although not as strongly as seen in other developed countries.
The Australian dollar rose 0.2% after the reading, with strength in the labour market spurring some hopes that the Reserve Bank may yet increase interest rates further this year.
A tight labour market underpinned consumer spending, which in turn was a key driver of inflation over the past year. While inflation has cooled substantially this year, it still remains well above levels which the RBA is comfortable with.
The RBA kept rates on hold in September, but said it was still considering more rate increases, and will continue with a data-driven approach to future rate decisions.
