Australia’s labor market reported stronger than expected hiring growth of 44K in January versus expectations of a 19.4K gain, buoyed by robust full-time employment.
However, the jobless rate still rose from 4.0% to 4.1% as expected during the month. Components of the report revealed that this was likely due to a pickup in participation rate, indicating optimism in the jobs market.
In addition, the previous month’s reading saw an upgrade from 56.3K in employment growth to 60K.
Key Takeaways:
- Full-time employment increased significantly by 54,100 positions to 10,092,800 people
- The unemployment rate edged up to 4.1% in seasonally adjusted terms from 4.0%
- Participation rate increased to 67.3%, indicating continued labor market engagement
- Part-time employment decreased by 10,100 positions
- Monthly hours worked declined to 1,971 million hours in seasonally adjusted terms
Link to Australia’s Labour Force Survey (January 2025)
While the strong full-time employment growth suggested underlying labor market resilience, steady underemployment and the decrease in hours worked could indicate some softening in overall conditions, likely enough for the Reserve Bank of Australia (RBA) to maintain its cautious outlook.
Market Reaction
Australian Dollar vs. Major Currencies: 5-min
Overlay of AUD vs. Major Currencies Chart by TradingView
The Australian dollar, which had been edging slightly lower a few minutes before the jobs release, had a mixed reaction despite seeing strong headline data for January and positive revisions to December figures. The Aussie appeared to quickly fade its initial pop higher, as the jobs numbers didn’t seem enough to challenge the RBA’s dovish stance.
AUD raked in the strongest immediate gains versus the relatively weak EUR, which was bogged down by regional jitters from Russia-Ukraine negotiations in previous sessions, before returning its winnings a couple of hours after the release.
However, the Aussie shed its gains (and more) versus the much stronger Japanese yen (-0.48%) while also retreating versus the franc (-0.10%) as the Asian session went on.
