Labour market conditions in Australia moderated in June, with full-time employment falling after two months of solid increases and the unemployment rate picking up to its highest level since late 2021. Strong conditions in the labour market were cited by Reserve Bank of Australia officials when they left policy rates on hold at their most recent meeting last week, but today's data may give them greater confidence that inflation pressures will remain contained on a sustainable basis.

The number of people employed in Australia rose by 2,000 persons in June after falling by 2,500 persons in May, well below the consensus forecast for an increase of 23,000. This increase, however, was driven by part-time employment, which fell by 40,200 persons after a previous decline of 41,200 persons. Full-time employment, in contrast, fell sharply, down 38,200 persons after a previous increase of 37,700 persons. Hours worked fell 0.9 percent on the month after increasing 1.3 percent previously.

Today's data also show the unemployment rate rose from 4.1 percent in May to 4.3 percent in June. The participation rate rose from 67.0 percent to 67.1 percent, jsut below the record high of 67.2 percent recorded in January.

Australia expected to show a 23K increase in employment on the month in June. The jobless rate is expected steady at 4.1 percent from 4.1 percent in May.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labour force.

This report is used as an indicator of the health of the domestic economy. Employment trends highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.