The data is here: Australia – July employment data: Employment Change July: -0.3K (vs. expected +13.2K)

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From Dr Shane Oliver – Head of Investment Strategy and Economics and Chief Economist at AMP Capital;

  • Australian July (employment data is) not helped by rise in (the participation) rate to 64.8% (from 64.7%). Not good, but not as bad as it looks as full time jobs +14.5K.
  • Rising trend in leading jobs indicators,eg job ads,also points to better jobs (growth) ahea
  • Can’t see (the) RBA reacting to jobs data as not bad (enough). But they do further cut chance of hike & leave open chance of cut. So nicely (negative) for $A

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Paul Bloxham of HSBC:

  • “There’s no question, this tells us the labour market is weak”
  • The surprise uptick in unemployment is unlikely to move the RBA to cut interest rates again, as the Reserve Bank of Australia has been expecting the unemployment rate to continue to rise before it improves
  • “We don’t see this as the beginning of a sharp deterioration; we think this is just a continuation of the previous upward trend in the unemployment rate”
  • “We don’t think it’s going to be enough to see the RBA deliver further interest rate cuts. We think they’re somewhat constrained by the housing market continuing to boom”

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ANZ senior economist Justin Fabo:

  • The result is clearly worse than expected
  • But has doubts about whether changes in the sample of people the bureau surveyed, as well methodical changes in who it counted as unemployed
  • “Moreover, most other labour market indicators are improving, at least slowly, so the jump in the unemployment rate does look odd in that regard”
  • “We’ll need the August report to confirm that view”

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Chief economist at Commonwealth Bank of Australia, Michael Blythe:

  • “It’s been a long time since Australia has had that kind of number and we now have a higher unemployment figure than the U.S.”
  • “Most other countries have unemployment figures trending down but our number is edging higher. This is quite a significant divergence from our trend”
  • Today’s result “validates the RBA’s desire for period of stability that it’s been talking about for the last few months”

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Westpac’s Justin Smirk (bolding mine):

  • “The real surprise today was the surge in the unemployment rate to 6.4%, exceeding Westpac’s market high call of 6.1%. The market was expecting a flat print at 6.0% (range 5.8% to 6.1%). Why such a large surge in the unemployment rate? The lack of employment growth compared to market expectations for a 14k rise is worth 0.1ppt. The rise in the participation rate, from 64.7% to 64.8% (rounded down from 64.85%) is worth about 0.2ppt and then some rounding gets us to 6.4%.”
  • “The ABS claims that changes made to the survey for identifying the unemployed would not have had a significant impact on estimates of participation or unemployment. Given that what they are doing is tightening the definition for being unemployed and actively looking for work it would appear that these changes could lower, rather than lift, participation.”
  • “We suspect we may have now seen the peak in unemployment, but will firm our forecasts during the completion of the Labour Force Economic Bulletin”