The Australian unemployment rate held steady at 4.9% this past month, though April’s employment change report revealed a contraction of 22.1K jobs. The Australian dollar (AUD) took a loss this morning as expectations for an interest rate hike later this month faded with today’s job report.
Many analysts do not expect this month’s reading to have a major impact overall, given the Australian economy’s ability to add over 300K jobs over the past year. The Wall Street Journal noted Australia’s announced plan to ambitiously add another 500K jobs in the 2011-2012 fiscal year.
The fact that unemployment held steady amid this job loss gives impetus to these plans and a possibility for interest rate hikes if other fundamentals come in line with current expectations. The Reserve Bank of Australia (RBA) signaled its willingness last week to raise rates in its impending meetings, but speculation took hold this morning with the severely depressed jobs report.
Tuesday’s trade balance figures out of the Australian economy, as noted in a previous article, also revealed solid growth in the nation’s surplus, with the mining industry’s export boost lending a helping hand. With jobs being the only factor holding an interest rate hike in check, the AUD may gain support if other data can induce such a move by the RBA.
