📝 Underlying Deterioration In Labour Market Unlikely to Be Abrupt: NAB

Employment disappointed in July, falling 15k (NAB and Consensus +15k), and the unemployment rate rose 2 tenths to 3.7% (NAB and Consensus 3.6%). Month to month swings in employment growth continue to be volatile, but today’s update is clearly on the soft side. Overall, while we don’t read today’s data as an abrupt shift in the labour market data in July, it is consistent with some underlying cooling in the labour market and combined with the WPI earlier this week further suggests the RBA will be on hold in September. There is reason to be cautious about over-interpreting the weak result. The July decline in employment comes after 2 months of very strong growth and the ABS points out that the only other measured employment fall in 2022 was in April, a month that also included school holidays which are affecting seasonal adjustment because of more recent changes to when people start new jobs. Sample rotation also contributed unfavourably to the unemployment rate in the month. - NAB