TD Securities analysts note Australia’s April jobs report disappointed, with a 18.6k employment drop and unemployment jumping to 4.5% despite lower participation. They argue this earlier-than-expected rise in unemployment makes a June Reserve Bank of Australia (RBA) pause almost certain. However, they still see scope for an August hike as broader inflation pressures build and upcoming Consumer Price Index (CPI) prints are scrutinized.

Soft labour data but August hike risk

“Australia April jobs report disappointed investors as overall jobs growth printed at -18.6k (cons: 15k, TD: 25k, prior: 23.3k), its first negative print since Nov’25. Full-time jobs growth fell by 10.7k and part-time jobs also dropped by 7.9k.”

“More worryingly, the unemployment rate spiked to 4.5% (cons: 4.3%, prior: 4.3%) despite a fall in participation rate to 66.7% (prior: 66.8%). While the RBA assumed that the higher cash rate and oil price shock will dampen aggregate demand to cool inflation, today’s earlier-than-expected jump in unemployment rate may come as a surprise since their SoMP forecasts only see a 4.6% u/e rate beyond June 2027.”

“A June pause now seems all but certain after today’s report and the Board’s preference to “skip” June from the RBA May minutes. We believe an Aug hike is still on the table as broader inflation pressures are likely to build up and the next few CPI reports will be closely scrutinized.”

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