Australian unemployment rate expected to bounce back in March

Market analysts anticipate the Australian Unemployment Rate increased to 3.9% in March after declining to 3.7% in February. As mentioned before, the country is expected to have added 7.2K new jobs following 116.5K positions added in February.

The labor sector in Australia has remained relatively strong over the past few months, although, opposite to other major counterparts, the Reserve Bank of Australia (RBA) does not seem to care about whether the job market remains tight. 

As widely anticipated, the RBA kept its policy rate unchanged for the third straight meeting at 4.35% when it met in March. For a change, policymakers scrapped any reference to possible further increases, pushing AUD/USD lower. 

“If our forecasts come true, and I really hope we’re on that narrow path that Phil (Lowe - former RBA Governor) used to talk about, then we can slow the economy enough that it preserves a lot of the gains in employment and brings inflation down,” Governor Michele Bullock noted, following the central bank meeting. The Board is hopeful they will head into a soft landing as long as inflation remains subdued. 

The Australian Bureau of Statistics (ABS) publishes the Consumer Price Index (CPI) quarterly. According to the latest release, the CPI rose 0.6% in the last quarter of 2023 and 4.1% in the 12 months to December 2023. The RBA’s inflation goal is between 2% and 3%.

It is worth mentioning that wage growth is reported separately. The ABS also offers a quarterly report, with the latest showing the seasonally adjusted Wage Price Index (WPI) rose 0.9% in the last quarter of 2023 and 4.2% over the year.  At this point, wage growth continues to outstrip inflation, but it's not something to care about today.