I posted an preview of the Australian employment report for July here earlier:

Due at 0130 GMT

  • Employment Change: K expected 15K, prior 50.9K (a cracking result indeed)
  • Unemployment Rate: % expected 5.4%, prior 5.4%
  • Full Time Employment Change: K prior was 41.2K
  • Part Time Employment Change: K prior was 9.7K
  • Participation Rate: % expected 65.7%, prior was 65.7%

This via NAB (bolding mine):

NAB expects a more positive outcome than the market 

  • Even after a stellar 51k rise in employment last month, NAB’s internal indicator, in combination with a rise in SEEK job ads, suggests employment rose by another 25k in July.
  •  Such a lift in employment tends to be correlated with a slight lift in the participation rate; we expect the participation rate to lift slightly from 65.66%, to remain at 65.7%, rounded to 1 decimal place. 
  • This keeps the unemployment rate at 5.4%.

 However, if the participation rate stays unchanged or declines slightly, the unemployment rate will decline to 5.3%. 

  • Currently, to 2 decimal places, the unemployment rate sits at 5.37%. There’s some risk that the participation rate doesn’t rise as we expect, given the participation rate is at a historically high level and our models suggest it is close to its cyclical peak. 

Hence, while our central scenario is for the unemployment rate to remain at 5.4%, we flag some downside risk to our forecast.


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