Employers hired almost 65,000 more workers in August, many more than expected, improving the prospects that the economy will avoid a hard landing but also raising the possibility the Reserve Bank may hike interest rates again.
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The unemployment rate last month was 3.7%, the Australian Bureau of Statistics said on Thursday. Economists had forecast the economy would add 25,000 jobs in August, which would have left the jobless rate at July’s reported level of 3.7%.
Of the 64,900 extra jobs recorded in August, all but 2,800 of them were part-time roles. Hours worked fell 0.5% but remained 3.7% higher than a year earlier.
“The participation rate also increased, up to a record high of 67% in August, which, together with the high employment-to-population ratio [of 64.5%], continues to reflect a tight labour market,” Bjorn Jarvis, ABS head of labour statistics, said.
The labour market has been surprisingly resilient for several years, with the jobless rate touching 3.4% in July and October 2022, near half-century lows.
The treasurer, Jim Chalmers, welcomed the August jobs figures as “a tremendous result and a testament to the resilience of the Australian economy and the Australian people”.
Chalmers said the tally of new jobs since the Albanese government had come to power was now at 550,000, or the most by any new government.
Still, high interest rates, high but moderating inflation and continuing global uncertainty, particularly over China’s slowdown, “would inevitably weigh on our economy and our labour market in the year ahead”, he said.
The RBA’s latest forecast has the unemployment rate rising to 4% by December and 4.5% by the end of 2024 as impacts of 12 interest rates since May 2022 are felt.
Prior to the release of the jobs data, most economists had been predicting interest rates would remain on hold well into next year.
The initial market reaction was modest, with the dollar hovering around 64.4 US cents and stocks retaining their gains for the day of about 0.25%.
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