Australia jobless rate falls to 2-year low in August, overall employment surprisingly disappoints

The rate of unemployment in Australia fell to a two-year low in August, with the rate of employment declining as well, for the first time in seven months, although the underlying trend in the labor market remains susceptible to volatile economic situations.

Overall employment fell 3,900 in August, while the unemployment rate declined by 0.1 percentage point to 5.6 percent, confounding expectations calling for no change, data released by the Australian Bureau of Statistics showed Thursday. Economists in a median estimate called for an increase in employment by about 15,000.

Further, full-time employment, which has proven more volatile this year, rose 11,500 last month. Full-time jobs declined at a revised 43,400 pace in July. Part-time jobs fell 15,400 in August after gaining a revised 69,900 the month before.

Consistent jobs creation for most of the year has painted a favourable picture of Australia’s economy, which recently recorded its 21st consecutive quarter of economic expansion. However, consumers’ inflation expectations remained subdued, according to a private measure released Thursday, suggesting weak price growth coupled with fall in jobs would pose serious challenges to the economy in the near term.

Meanwhile, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell nearly 1 basis point to 2.161 percent, the yield on long-term 15-year note also dipped 2 basis points to 2.550 percent and the yield on short-term 3-year climbed 1-1/2 basis points to 1.647 percent, while the benchmark Australia's S&P/ASX 200 index traded 0.31 percent higher to 5,214.5 by 04:50 GMT.