Unemployment in Australia rose ahead of US tariffs coming into effect

In March, the unemployment rate in Australia rose to 4.1% while employment grew by 32,200—below forecasts of an increase of 40,000. As noted by Bloomberg, this indicates a slight weakening of the country's labor market even before the effects of new US tariffs kick in.

The Australian dollar and the yields on three-year bonds, which are especially policy-sensitive, fell earlier as traders' expectations for a rate cut at the central bank's May meeting faded.

In the midst of escalating trade tensions, Australia's labor market and economy remain relatively stable, according to Krishna Bhimavarapu of State Street Global Advisors. However, the slowdown in China's economy may eventually affect them as well. According to the expert, the best option for the Reserve Bank of Australia (RBA) now is to reduce rates.

Last week, the head of the RBA Michelle Bullock stressed the necessity to remain cautious and evaluate carefully the impact of the new US tariff regime. In her opinion, volatility in the market and economy will remain, although the Australian financial system is robust and able to withstand external shocks.