Westpac and CBA forecast a 15k jobs gain with unemployment holding at 4.4%, but warn of rising labour market slack.
Australia’s June employment report is expected to show a 15k increase in jobs, keeping the unemployment rate steady at 4.4%, according to major bank forecasts. However, both Westpac and CBA highlight growing labour market slack, particularly rising underemployment, which suggests a softer underlying trend than earlier data indicated.
The participation rate is projected to remain at 66%, while underemployment adjustments by Westpac reveal a material rise, contradicting previous sideways trends. CBA warns of a potential downside surprise to 4.3%, which could reinforce expectations of a more dovish RBA stance. Despite the steady headline print, traders are likely to focus on underemployment details for signs of weakening labour conditions.
A weaker-than-expected outcome, particularly near 4.3% or with higher underemployment, may weigh on the AUD by supporting bets on a less hawkish RBA. The central bank’s own forecast of 4.2% unemployment for the June quarter remains above the current level, keeping pressure on policymakers to adjust their outlook.