Although the Australian economy has produced around 300,000 jobs in the last twelve months, the employment rate has struggled to approach 5%. A combination of population growth and a rising participation rate explained the apparent unresponsiveness of the jobless rate in the face of an expanding employment market. That was until the September Labour Force figures came out.
The ABS has released employment estimates for September which indicate the total number of people employed in Australia in either full-time or part-time work increased by 5,600.
Market expectations prior to the report’s release were for 15,000 new positions to be created and for the unemployment rate to remain at 5.3%. However, financial markets reacted by sending local bond yields and the Aussie dollar higher on the back of the surprisingly-low unemployment rate. 3-year ACGB yields finished the day 4bps higher at 2.14% while 10-year and 20-year yields each increased by 2bps to 2.74% and 3.06% respectively. The Aussie dollar initially jumped, then fell back over the course of the day to 71.20 US cents.