Spotlight on unemployment as jobs market loses heat
Signs the labour market is easing will alleviate Reserve Bank concerns about inflation with Australia's jobless rate tipped to remain at historic lows.
Economists predict labour force figures for May - to be released by the Australian Bureau of Statistics on Thursday - will show the unemployment rate held steady at 4.1 per cent.
Alongside the expected 20,000 new jobs added to the economy - following an increase of 89,000 in April - the figures would indicate ongoing tightness in the labour market.
The Reserve Bank of Australia has previously expressed concern the jobs market could stall progress on inflation but has become more concerned about international factors than domestic developments, ANZ economist Aaron Luk said.
While an unemployment rate of 4.1 per cent is below pre-COVID-19 averages and the central bank's estimate for the maximum employment rate that does not contribute to rising inflation, other indicators show softening in the labour market.
"Growth in hours worked has been relatively subdued in the last three months and our own ANZ-Indeed job ads series also declined in May to its lowest level since March 2021," Mr Luk told AAP.
"I think we can expect a gradual easing in the labour market over the course of 2025/26."
Resilience in Australia's jobs market, despite higher interest rates, has been underpinned by growth in government-funded jobs, up from 28 per cent of total employment in 2020 to 31 per cent currently.
Despite a slowdown in public demand, ongoing growth in funding for the NDIS, schools and hospitals should keep a lid on unemployment, Mr Luk said, even with a moderate uptick predicted in 2025.
Given the Reserve Bank's bigger concerns about trade uncertainty and its impact on Australia's anaemic economic growth, the jobs market should not be a barrier to further interest rate cuts.
"Inflation is coming back within the two to three per cent target band, you've got wages easing as well, you've got maybe some signs of labour market easing a little bit," Mr Luk said.
"The conditions are there for the RBA to have a bit more confidence in cutting and we think they're going to cut in August."
Economists are not predicting the world's most influential central bank, the US Federal Reserve, to cut rates when it meets on Wednesday.
The Federal Open Market Committee has kept its benchmark funds rate unchanged in a 4.25 to 4.50 per cent range since December and indicated it is comfortable staying on pause while the impacts of President Donald Trump's tariffs and tax cuts become clear.
Wall Street's main indices ended sharply lower on Friday, with investors spooked by Iran launching missiles at Israel in response to intensive strikes aimed at crippling its ability to build nuclear weapons.
Oil prices surged almost 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East.
The S&P 500 declined 1.13 per cent to end the session at 5,976.97 points, the Nasdaq was down 1.30 per cent to 19,406.83 points and the Dow Jones Industrial Average dropped 1.79 per cent to 42,197.79 points.
Australian share futures fell 20 points, or 0.23 per cent, to 16,048.
Also impacted by news of Israel's attack, the S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Signs the labour market is easing will alleviate Reserve Bank concerns about inflation with Australia's jobless rate tipped to remain at historic lows.
Economists predict labour force figures for May - to be released by the Australian Bureau of Statistics on Thursday - will show the unemployment rate held steady at 4.1 per cent.
Alongside the expected 20,000 new jobs added to the economy - following an increase of 89,000 in April - the figures would indicate ongoing tightness in the labour market.
The Reserve Bank of Australia has previously expressed concern the jobs market could stall progress on inflation but has become more concerned about international factors than domestic developments, ANZ economist Aaron Luk said.
While an unemployment rate of 4.1 per cent is below pre-COVID-19 averages and the central bank's estimate for the maximum employment rate that does not contribute to rising inflation, other indicators show softening in the labour market.
"Growth in hours worked has been relatively subdued in the last three months and our own ANZ-Indeed job ads series also declined in May to its lowest level since March 2021," Mr Luk told AAP.
"I think we can expect a gradual easing in the labour market over the course of 2025/26."
Resilience in Australia's jobs market, despite higher interest rates, has been underpinned by growth in government-funded jobs, up from 28 per cent of total employment in 2020 to 31 per cent currently.
Despite a slowdown in public demand, ongoing growth in funding for the NDIS, schools and hospitals should keep a lid on unemployment, Mr Luk said, even with a moderate uptick predicted in 2025.
Given the Reserve Bank's bigger concerns about trade uncertainty and its impact on Australia's anaemic economic growth, the jobs market should not be a barrier to further interest rate cuts.
"Inflation is coming back within the two to three per cent target band, you've got wages easing as well, you've got maybe some signs of labour market easing a little bit," Mr Luk said.
"The conditions are there for the RBA to have a bit more confidence in cutting and we think they're going to cut in August."
Economists are not predicting the world's most influential central bank, the US Federal Reserve, to cut rates when it meets on Wednesday.
The Federal Open Market Committee has kept its benchmark funds rate unchanged in a 4.25 to 4.50 per cent range since December and indicated it is comfortable staying on pause while the impacts of President Donald Trump's tariffs and tax cuts become clear.
Wall Street's main indices ended sharply lower on Friday, with investors spooked by Iran launching missiles at Israel in response to intensive strikes aimed at crippling its ability to build nuclear weapons.
Oil prices surged almost 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East.
The S&P 500 declined 1.13 per cent to end the session at 5,976.97 points, the Nasdaq was down 1.30 per cent to 19,406.83 points and the Dow Jones Industrial Average dropped 1.79 per cent to 42,197.79 points.
Australian share futures fell 20 points, or 0.23 per cent, to 16,048.
Also impacted by news of Israel's attack, the S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Signs the labour market is easing will alleviate Reserve Bank concerns about inflation with Australia's jobless rate tipped to remain at historic lows.
Economists predict labour force figures for May - to be released by the Australian Bureau of Statistics on Thursday - will show the unemployment rate held steady at 4.1 per cent.
Alongside the expected 20,000 new jobs added to the economy - following an increase of 89,000 in April - the figures would indicate ongoing tightness in the labour market.
The Reserve Bank of Australia has previously expressed concern the jobs market could stall progress on inflation but has become more concerned about international factors than domestic developments, ANZ economist Aaron Luk said.
While an unemployment rate of 4.1 per cent is below pre-COVID-19 averages and the central bank's estimate for the maximum employment rate that does not contribute to rising inflation, other indicators show softening in the labour market.
"Growth in hours worked has been relatively subdued in the last three months and our own ANZ-Indeed job ads series also declined in May to its lowest level since March 2021," Mr Luk told AAP.
"I think we can expect a gradual easing in the labour market over the course of 2025/26."
Resilience in Australia's jobs market, despite higher interest rates, has been underpinned by growth in government-funded jobs, up from 28 per cent of total employment in 2020 to 31 per cent currently.
Despite a slowdown in public demand, ongoing growth in funding for the NDIS, schools and hospitals should keep a lid on unemployment, Mr Luk said, even with a moderate uptick predicted in 2025.
Given the Reserve Bank's bigger concerns about trade uncertainty and its impact on Australia's anaemic economic growth, the jobs market should not be a barrier to further interest rate cuts.
"Inflation is coming back within the two to three per cent target band, you've got wages easing as well, you've got maybe some signs of labour market easing a little bit," Mr Luk said.
"The conditions are there for the RBA to have a bit more confidence in cutting and we think they're going to cut in August."
Economists are not predicting the world's most influential central bank, the US Federal Reserve, to cut rates when it meets on Wednesday.
The Federal Open Market Committee has kept its benchmark funds rate unchanged in a 4.25 to 4.50 per cent range since December and indicated it is comfortable staying on pause while the impacts of President Donald Trump's tariffs and tax cuts become clear.
Wall Street's main indices ended sharply lower on Friday, with investors spooked by Iran launching missiles at Israel in response to intensive strikes aimed at crippling its ability to build nuclear weapons.
Oil prices surged almost 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East.
The S&P 500 declined 1.13 per cent to end the session at 5,976.97 points, the Nasdaq was down 1.30 per cent to 19,406.83 points and the Dow Jones Industrial Average dropped 1.79 per cent to 42,197.79 points.
Australian share futures fell 20 points, or 0.23 per cent, to 16,048.
Also impacted by news of Israel's attack, the S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Signs the labour market is easing will alleviate Reserve Bank concerns about inflation with Australia's jobless rate tipped to remain at historic lows.
Economists predict labour force figures for May - to be released by the Australian Bureau of Statistics on Thursday - will show the unemployment rate held steady at 4.1 per cent.
Alongside the expected 20,000 new jobs added to the economy - following an increase of 89,000 in April - the figures would indicate ongoing tightness in the labour market.
The Reserve Bank of Australia has previously expressed concern the jobs market could stall progress on inflation but has become more concerned about international factors than domestic developments, ANZ economist Aaron Luk said.
While an unemployment rate of 4.1 per cent is below pre-COVID-19 averages and the central bank's estimate for the maximum employment rate that does not contribute to rising inflation, other indicators show softening in the labour market.
"Growth in hours worked has been relatively subdued in the last three months and our own ANZ-Indeed job ads series also declined in May to its lowest level since March 2021," Mr Luk told AAP.
"I think we can expect a gradual easing in the labour market over the course of 2025/26."
Resilience in Australia's jobs market, despite higher interest rates, has been underpinned by growth in government-funded jobs, up from 28 per cent of total employment in 2020 to 31 per cent currently.
Despite a slowdown in public demand, ongoing growth in funding for the NDIS, schools and hospitals should keep a lid on unemployment, Mr Luk said, even with a moderate uptick predicted in 2025.
Given the Reserve Bank's bigger concerns about trade uncertainty and its impact on Australia's anaemic economic growth, the jobs market should not be a barrier to further interest rate cuts.
"Inflation is coming back within the two to three per cent target band, you've got wages easing as well, you've got maybe some signs of labour market easing a little bit," Mr Luk said.
"The conditions are there for the RBA to have a bit more confidence in cutting and we think they're going to cut in August."
Economists are not predicting the world's most influential central bank, the US Federal Reserve, to cut rates when it meets on Wednesday.
The Federal Open Market Committee has kept its benchmark funds rate unchanged in a 4.25 to 4.50 per cent range since December and indicated it is comfortable staying on pause while the impacts of President Donald Trump's tariffs and tax cuts become clear.
Wall Street's main indices ended sharply lower on Friday, with investors spooked by Iran launching missiles at Israel in response to intensive strikes aimed at crippling its ability to build nuclear weapons.
Oil prices surged almost 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East.
The S&P 500 declined 1.13 per cent to end the session at 5,976.97 points, the Nasdaq was down 1.30 per cent to 19,406.83 points and the Dow Jones Industrial Average dropped 1.79 per cent to 42,197.79 points.
Australian share futures fell 20 points, or 0.23 per cent, to 16,048.
Also impacted by news of Israel's attack, the S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
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