The unemployment rate edged up to 5.8 per cent in June, in line with market expectations, meaning wage growth is likely to remain "subdued", says HSBC.
Employment rose by 8,000 jobs in June (below the market expectation of 10,000) and the unemployment rate increased from 5.7 per cent to 5.8 per cent.
Commenting on the job numbers, HSBC said spare capacity in the labour market is likely to keep wage growth “subdued”.
HSBC anticipates these labour market trends will continue into next year, with employment expected to grow “2 per cent year-on-year” and unemployment to hold steady at “around 5.7 to 5.8 per cent”.
HSBC expects the Reserve Bank of Australia consequently to cut the cash rate once more, “most likely in August”, though the bank notes this decision will rest heavily on consumer price index data for the second quarter.
“It is difficult to see any near-term catalyst that would generate stronger employment growth and push unemployment lower. But the end of the mining investment downswing is within sight, which may help generate a little more wage growth from mid-2017 onwards,” the bank said.
ThinkMarkets senior market analyst Matt Simpson, however, said an August cut “is not guaranteed”, and the recent labour market data in fact made a cut less likely.
“Whilst headline employment only saw a 7.9K increase, it is good to see full-time power ahead with 38.4K jobs whilst part-time reduced -30.5K. It almost looks like a job-swap, but this time for the better,” Mr Simpson said.