Australia’s Jobs Market Shows Unusual Resilience
The Australian jobs market is expected to continue its unusual resilience, with fresh data set to be released this week. Despite expectations that the unemployment rate will rise over the course of 2025, forward indicators point to more jobs growth ahead of the Australian Bureau of Statistics’ labour force release on Thursday. Economists predict that the figures will show the unemployment rate held at a relatively low 4.1 per cent in June, while about 20,000 jobs are tipped to have been added to the economy.
Labour Market Remains Healthy
NAB’s head of Australian economics, Gareth Spence, still expects the jobless rate to rise to 4.4 per cent by year-end, but signs point to a labour market still in good health. The bank’s monthly business survey, released last week, showed business conditions spiked nine index points, while ANZ-Indeed job ads climbed to a 12-month high. This suggests that the labour market is still creating new job opportunities, which is a positive sign for the economy.
Impact of Reserve Bank’s Decision
Despite the Reserve Bank surprising economists and traders by leaving rates on hold on Tuesday, Mr Spence does not expect a major negative impact on the economy. He believes that the focus for the RBA will be ensuring the labour market remains healthy going forward, and that the timing of cuts is not super important. Instead, it’s more about where the interest rates end up. Further cuts towards what the central bank sees as a more neutral cash rate will be needed to support consumption, Mr Spence said.
Household Spending and Consumer Confidence
Household spending has recovered slower than expected in the first half of 2025, as global uncertainty weighed on consumers and set back the handover from public to private demand as the main driver of economic growth. Another insight into household confidence levels will be revealed in the Westpac-Melbourne Institute consumer sentiment report on Tuesday. This will provide a better understanding of how consumers are feeling about the economy and their spending habits.
Building Activity Data
On Wednesday, the ABS will release building activity data for the March quarter. The number of dwellings that began construction in the last three months of the year fell 4.4 per cent to just under 42,000, well below the 60,000 a quarter needed to reach the national housing accord target of 1.2 million new homes over five years. After trending upwards through the second half of 2024, building approvals have flatlined since January. This suggests that the construction industry is facing some challenges, and it will be important to monitor this data closely.
Global Market Trends
Wall Street investors meanwhile appear to have gone cold on US trade policy, with Meta Platforms weighing on the S&P 500 after Donald Trump intensified his tariff offensive against Canada. The president has ramped up his tariff assault, saying the US will impose a 35 per cent tariff on Canadian imports next month and plans are afoot to impose blanket tariffs of 15 per cent or 20 per cent on most other trading partners. This has had a negative impact on the US stock market, with the S&P 500 declining 0.33 per cent to end the session at 6,259.75 points.
Conclusion
In conclusion, the Australian jobs market is expected to continue its unusual resilience, with fresh data set to be released this week. Despite some challenges, the labour market remains healthy, and economists predict that the unemployment rate will remain relatively low. However, household spending and consumer confidence are still recovering, and the construction industry is facing some challenges. As the global market trends continue to evolve, it will be important to monitor the data closely and adjust economic policies accordingly to support the growth and stability of the Australian economy. Australian share futures dropped 13 points, or 0.15 per cent, to 6,847, and the benchmark S&P/ASX200 index on Friday finished down 9.1 points, or 0.11 per cent, to 8,580.1.
