Aus macro/Aus employment

Aus employment numbers ahead of expectations, nearly 40K jobs added, strong participation (who could afford to be out of the labour market given the cost of living!) and the unemployment rate drops back to 4%.

Good outcomes, really. Volatile data, and plenty of concerns about the rising trend in the unemployment rate, but this at least is a good reasonably straightforward print.

Some mild negatives include the length of time taken for the unemployed to find work again, and there is an overall slowing in the rate of hiring (however the layoffs/separations are low, so the net is positive).

We’ve commented for a while now it “feels” like you are only ever a print or two away from upending a prior narrative (recession!, overheating!) and this foots that bill. The survey data has been (as it has in the US) quite a bit more negative, and that negativity does not seem to be totally translating into hard data like employment.

Given that people consume out of wages and you only get a wage when you’ve got a job, this is good overall for the equity market, and neutral to modestly negative for longer dated yields. Longer run, we think the restrictive stance of policy means upwards pressure on the unemployment rate over time.

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