By Stella Qiu
SYDNEY, Oct 15 (Reuters) – Australian employment unexpectedly fell in September, data showed on Thursday, while the unemployment rate held at a five-year high, a soft result that had investors paring back wagers on another hike in interest rates.
Markets now imply a nearly 90% chance the Reserve Bank of Australia will leave interest rates unchanged at 4.6% in November, up from 66% before the data, after delivering four rate hikes this year. The chance of a move in December has fallen to just 31%, with another rate increase no longer fully priced in.
The Australian dollar slipped 0.2% to $0.6956, while three-year government bond futures rallied 11 ticks to 95.19.
Figures from the Australian Bureau of Statistics showed net employment slid 39,300 in September from August, when it rose a downwardly revised 29,300. That was the biggest monthly fall since February last year, as part-time roles tumbled 73,700.
Analysts had forecast a rise of around 20,000.
The jobless rate stayed at 4.7%, with the previous month revised up from an initial 4.6% reading. The participation rate dipped to 66.8%, while hours worked rose 0.1% and underemployment edged up to 6.3%.
“The rise in the unemployment rate to 4.7% gives the RBA more room to be patient and assess incoming inflation data before raising rates again,” said Oscar Guth, an economist for Oxford Economics Australia.
“We expect unemployment to rise further through 2027, exceeding 4.8% late in the year as the lagged effects of oil price shocks and tighter monetary policy continue to affect the labour market.”
The RBA has warned of caution in interpreting the monthly jobs data given the methodological changes to the survey, arguing that more forward-looking indicators such as job ads pointed to a broadly stable labour market, the minutes of the September policy meeting showed on Tuesday.
The central bank has lifted interest rates four times this year to 4.6% to tame inflation, but annual headline inflation ran at 4% in August, and a core measure remained elevated at 3.6%, both above its target band of 2% to 3%.
(Reporting by Wayne Cole; Editing by Christopher Cushing and Christian Schmollinger)
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