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The Australian Bureau of Statistics is scheduled to release the newest labour data, regarding the monthly change in employment numbers and the overall unemployment rate for the Aussie economy this Thursday. The overall market forecast is for a total of 15.2k new jobs to have been added for the month of April, which would measure an incremental decrease of close to 10 thousand compared to the data for March, and the underlying rate is expected to remain at 5%.
In its previous statement, the Reserve Bank of Australia was overall cryptic in regards to its general opinions about the state of affairs in the national labour market, stating that:
“There has been a significant increase in employment, the vacancy rate remains high, and there are reports of skills shortages in some areas. Despite these positive developments, there has been little further progress in reducing unemployment over the past six months” [source]
However, the RBA did not delineate its opinions in regards to the sustainability of the labour market, despite the increased demand for high-skilled workers, and whether the Australian economy has reached a point at which there is no more room for growth. In terms of numbers, the unemployment rate was sitting at 4.9% in February, which also measured an 8-month low, and yet the central bank does not anticipate any further reductions at least until 2021.
Seemingly, the RBA remains complacent for the time being with trying to maintain the underlying unemployment rate at around 5%, with a shifted focus towards promoting higher hourly earnings. It appears that at the present rate the central bank recognizes that there is not much that can be done to crunch the numbers of the prevailing unemployment rate, and for that reason, its primary ambition is to maintain the current momentum in wage growth.
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In case that, the report on Thursday indicates a potential drop from the current level of 2.3% of the Australian annual change in hourly rates of pay, the local labour market would experience a noticeable hit in its best-performing sector at the present rate. That would also mean that the RBA would have tougher times ahead of itself to meet its inflation target-rate and it would also give certain credence to the recent market speculations that the RBA might be inclined to lower the interest rate to 1 per cent.
The AUDUSD pair is currently trading near the significant support level at 0.69841, as it bounced back from the 10-EMA following last week’s interest rate decision. Hence, the anticipated increase in volatility following the release of the labour data on Thursday can also be expected to check the strength of this level.
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