"Looking through the monthly noise, Australia's labor market is very gradually healing but employment growth remains below trend."
-Katrina Ell, an economist at Moody's Analytics
Unemployment rate in Australia rose more than expected, with some economists predicting it could climb higher. The jobless rate inched higher to 6.0% in June from a 5.9% in May, returning to the highest level in 11 years, as employers reduced full-time payrolls and more people looked for work in June. The number of people working full-time declined by 3,800, while those in part-time work increased 19,700. Overall, the number of people employed rose 15,900, overshooting expectations for a 12,000 rise, according to the Australian Bureau of Statistics. Australian participation rate rose to 64.7% in June from 64.6% in the previous month. While the increase in participation is generally seen as a positive thing, economists believe if the trend persists it could push the unemployment rate higher. The local dollar weakened after the data suggested the nation's economy is losing momentum. The Australian Dollar traded at 94.71 U.S. cents compared to 94.34 cents ahead of data release.
The Reserve Bank of Australia has signalled a period of rates stability after cutting the benchmark rate to 2.5% to avoid growth gap widening amid waning mining investment. Also, RBA Governor reiterated his concerns over the nation's elevated currency, which slows pace of achieving balanced growth in the economy.
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