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The Australian dollar fell after a softer jobs report from the Australian economy this morning, however, due to broad-based pressure on the greenback the AUDUSD pair has recovered most of its losses.
Most of the upward recovery in the AUDUSD pair is down to broader market sentiment as stocks continue to rally, which is helping commodity-related currencies.
Employment in Australia unexpectedly declined by 11,500 to 13.72 million in January 2023, missing market forecasts of a 20,000 gain and after a revised 19,900 fall a month earlier.
The latest reading marked the second straight month of drop in employment following very strong growth during 2022. By April 26 there will have been two further jobs reports for the RBA to mull over.
Full-time employment was down by 43,300 to 9,567,800, while part-time employment grew by 31,800 to 4,154,100. Over the year to January, employment gained 394,100 or 3.0 percent.
Australia’s seasonally adjusted unemployment rate unexpectedly increased to 3.7% in January 2023 from December’s near five-decade low of 3.5% and above market estimates of 3.5%.
This was the highest jobless rate since last May, as the number of unemployed climbed by 21,900 to 523,200. The unemployment rate was unchanged at 6.1%, while underutilization went up to 9.8% from 9.6%. Monthly hours in all jobs shrank by 40 million or 2.1% to 1,836 million.
The RBA’s hand was forced at its February meeting, as surging inflation made the +25 basis rate hike impossible to avoid. Anything less than that would mean the central bank shirking its responsibility to stable prices.
Looking ahead, the next official quarterly CPI report, for Q1 2023, is due on April 26, although there will be two monthly inflation reports by then. It’s the quarterly data that is the ‘official’ account of inflation.
If monthly inflation comes in a little tamer the Bank may take this time, and incoming data, to assess and consider its next move.
