What do we mean by Employment Change & Unemployment Rate?
The employment change measures the change of a country's employment. A negative release means the jobs that were lost were more than gained. On the contrary, more jobs were gained when the release shows a positive figure. In Australia, estimates include both part-time and full-time jobs, and it covers works for pay or profit, or unpaid family work.
On the other hand, the unemployment rate is the percent of people who are able to work that does not have a job. When the economy is in decline and jobs are less available, the unemployment rate is expected to go up. When the economy is growing and jobs are available and being created, it can be expected for the unemployment rate to go down.
What are the expectations for the Australian Employment Change & Unemployment Rate?
Australian Employment is expected to gain 30.5k in May, up from the 30.6k decrease previously in April. The employment change numbers have been positive for several months, even if the figure in April was not good.
On the other hand, Australian Unemployment Rate previously in May 2021 was at 5.5%. The expectation for June 2021 is for the unemployment rate to be unchanged at 5.5%. Will that be the case?
Professional Insight
The attitude of Deloitte towards the market is positive. “Today’s numbers show Australia’s recovery is becoming more broad-based,” Deloitte’s Kolding said.
“Families are spending locally, and businesses continue to invest, making the most of record-low interest rates and tax offsets,” Kolding added.
While the unemployment rate is expected to remain unchanged, we are seeing signs of recovery according to industry experts. People are less worried about what can happen and are more focused on returning to normalcy.
What happens if...
Do we get a number that is higher than expected? This could be a signal for a thriving economy given the circumstances. People would be more confident in the markets, both equities and foreign exchange. As people are getting more jobs you can expect to see a rise in spending, spurring the economy. This will mean that AUD may increase in value relatively versus other currencies.
Regarding the unemployment rate, what happens if we see a number higher than 5.5%? If that is the case we can expect the Australian Dollar to depreciate as a higher unemployment rate signals a weakening economy.
What happens if...
We see the Employment Change come out lower than expected? Markets will likely shrink because people could get nervous about losing jobs, meaning people will be unwilling to spend money and instead save for a rainy day. The AUD may decrease in value relatively versus other currencies.
Regarding the unemployment rate, what happens if we see a number lower than 5.5%? If that is the case we can expect the Australian Dollar to appreciate as a lower unemployment rate signals a strengthening economy.
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