Australia’s job losses reinforce case for RBA rate cuts

The number of jobs in Australia unexpectedly dropped in May. However, unemployment held steady as fewer people sought work. This indicates a weakening of the country’s labor market, Bloomberg says. 

The Australian Bureau of Statistics reports that employment dipped 2,500 driven by part-time job losses. Analysts had expected an increase of 21,200, the news agency adds. 

Economists at Commonwealth Bank of Australia say 80% of all new jobs over the past two years were added in the non-market sector, where goods and services are provided either for free or at subsidized prices. Yet, the experts note that this hiring might be coming to an end. 

Australia’s unemployment rate held steady at 4.1%. However, Bloomberg analysts forecast its growth in the second half of 2025.

Callam Pickering, economist at global job site Indeed, believes a slowing labor market could push the Reserve Bank of Australia (RBA) to cut rates in July, followed by another move in either August or September. Traders price in an 80% chance the central bank will lower borrowing costs to 3.6% on July 8.