Investing.com– Australia’s labor market grew much more than expected in July as strong job openings and record-high participation kept the sector running hot and contrary to the Reserve Bank’s expectations for a softer market.
The grew by 58,238 in July, data from the Australian Bureau of Statistics showed on Thursday. The reading was much higher than expectations for an increase of 20,200 people, and was even stronger than the prior month’s growth of 50,200 people.
While the grew unexpectedly to 4.2%, this came as the raced to a record high of 67.1%, against expectations it would remain steady at 66.9%.
Strength in the labor market factors into expectations of tighter monetary policy in the country, especially as inflation also remains sticky. A strong labor market has been a key driver of consumer inflation over the past year.
Such a trend gives the Reserve Bank of Australia more headroom to keep rates high for longer, or even raise them further, as warned by Governor Michele Bullock last week.
“The employment and participation measures remain historically high while unemployment and underemployment measures remain historically low, compared with what we saw before the pandemic. This suggests the labour market remains quite tight,” Kate Lamb, ABS head of labour statistics said in a note.
