ANZ economists Aaron Luk and Adam Boyton have characterised June’s labour force data as “soft”, suggesting a mild relaxation in Australian labour market conditions. Despite this, they don’t foresee a significant downturn, stating, “With forward labour market indicators having recovered somewhat in recent months, we don’t expect Thursday’s print to mark the start of a period of more pronounced labour market weakness, with only a very small drift higher in the unemployment rate flagged by our labour market indicator.”
The economists noted a fading employment momentum, with only 2,000 jobs added in June. This figure falls significantly short of market expectations, which had anticipated a gain of 20,000, following a slight decrease in May. ANZ indicated that this data aligns broadly with a quarterly GDP growth of 0.5 per cent, but raised concerns regarding weak productivity growth.
Despite the identified softness in the labour market, ANZ has reaffirmed its projection of a 25 basis point rate cut at the Reserve Bank of Australia’s (RBA) August meeting. While the RBA described the labour market as “strong” in July, ANZ anticipates a more tempered assessment next month, taking into account the recent indications of easing.
ANZ is a major Australian bank providing a range of financial services to individuals and businesses. It offers services such as banking, wealth management, and insurance, operating across Australia and internationally.
