Key facts
- Australia's unemployment rate rose to 4.5% in July, the highest since late 2021.
- Employment unexpectedly fell by 15,800 in July.
- The Reserve Bank of Australia held its cash rate steady at 4.35%.
- RBA Deputy Governor Andrew Hauser warned that further rate hikes are possible if inflation risks materialize.
- Potential inflation risks cited include the Middle East conflict, the global AI boom, and poor productivity.
Australia's unemployment rate unexpectedly rose to 4.5% in July, reaching its highest level since late 2021, as employment figures fell contrary to forecasts. The weak labor market data has eased pressure on the Reserve Bank of Australia (RBA) to further increase interest rates, leading to the Australian dollar's decline. Net employment decreased by 15,800 in July, while the jobless rate ticked up to 4.5% against expectations of remaining steady. Hours worked also saw a decline. The RBA had previously held its policy rate steady at 4.35% following three rate hikes this year. Despite the easing labor market, RBA Deputy Governor Andrew Hauser cautioned that further tightening could occur if inflation risks materialize, citing factors such as the Middle East conflict, the global AI boom, and poor productivity as potential drivers of inflation.