Economist at UOB Group Lee Sue Ann reviews the latest labour market report in Australia.

Key Takeaways

“Australia’s seasonally adjusted unemployment rate rose to 3.7% in Apr, from an almost 50-year low of 3.5% in Mar. Seasonally adjusted employment fell by around 4,300 people, compared to an estimate for a 25,000 gain, and the number of unemployed increased by 18,000 people. This is the first time this year that unemployment climbed.”

“Meanwhile, seasonally adjusted wage price index rose 0.8% in 1Q23, similar to 4Q22. The latest reading was a tad below expectations for 0.9% q/q growth. Annual wage growth came in at 3.7% for 1Q23, up from a revised 3.4% y/y gain in 4Q22 (3.3% y/y previously).”

“Overall, year-on-year pay gains were within the range consistent with the Reserve Bank of Australia (RBA)’s inflation target. This alongside today’s employment data, reinforce our view of the RBA holding its cash rate at 3.85%. There is, however, some risk to our view, and that the RBA may raise the cash rate one more time this year.”