The headline figures from Australia’s job report certainly beat expectations: a gain of 42K jobs instead of around 12K expected, and a drop of the unemployment rate to 6%, better than 6.2% predicted. The month of May seemed positive for Australia’s labor market.
AUD/USD initially jumped and reached a high of 0.7790, but not only failed to advance but actually fell back to the previous range. What’s wrong with the report?
One reason is a downwards revision for April: a loss of 13.7K jobs instead of 2.9K originally printed. Another reason lies in the type of jobs:Â only around a third of job gains came from full time positions: 14.7K. The rest, 27.3K, came from part time jobs.
In addition, the participation rate dropped from 64.8% to 64.7%, and that explains the slide in the unemployment rate.
In the past, doubts have been cast about the reliability of the jobs figures, and this time is no different. We would probably need to see consistently strong numbers without negative revisions in order to be convinced that the situation is genuinely positive.
Not that long ago, actually earlier this week, we heard worries from the RBA. A weaker A$ would certainly be helpful, including for jobs.
Here is how the moves look on the chart. All in all, AUD/USD enjoys the 0.77Â handle thanks to USD weakness, which may or may not last too long.
