Australia unemployment rate set to steady at 4.4% in June, signaling strong job market

• The Australian Unemployment Rate is forecast to hold steady at 4.4% in June.
• Australia is expected to have added 15K jobs in the month, fewer than the 40.3K gained in May.
• AUD/USD battles to extend gains beyond the 0.7000 mark. 

Australia will publish the June monthly employment report on Thursday at 01:30 GMT, and market participants expect a modest increase in job creation in the land Down Under. The Australian Bureau of Statistics (ABS) is expected to announce that the country added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%, unchanged from May. The Participation Rate, in the meantime, stood at 66.7% in the previous month.

The ABS reports both full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs entail working 38 hours or more per week, usually include additional benefits, and typically provide a consistent income. On the other hand, part-time employment generally means higher hourly rates but lacks consistency and benefits. That’s why the economy prefers full-time jobs. In May, Australia added 32.5K part-time positions and a modest 5.2K full-time ones.

Australian unemployment rate seen steady in June

The Australian data release, barring any huge surprise, could be overshadowed by the market’s sentiment. Mounting tensions in the Middle East are driving firmer Oil prices once again, which lately tend to result in a stronger US Dollar (USD) amid concerns inflation will soar and trigger a response from the Federal Reserve (Fed). However, the Greenback is having a hard time gaining momentum these days. The Australian Dollar (AUD) had been outpacing its American rival for most of July, slowly but steadily grinding north after bottoming at 0.6865 late in June.

The USD's latest slow reaction to risk-related headlines has something to do with recent United States (US) inflation data: the June Consumer Price Index (CPI) grew at a much slower pace than anticipated, increasing by 3.5% YoY in the month against the 4.2% posted in May. The figures cooled rate hike expectations in the US, hence limiting demand for the American currency. The fact that Oil prices are on the rise and could translate into higher inflation in the upcoming months is not yet dipping into investors’ hearts.

Meanwhile, the Reserve Bank of Australia (RBA) decided to leave the Official Cash Rate (OCR) unchanged at 4.35% when it met in June, despite acknowledging that “headline and underlying inflation are still too high,” according to the monetary policy Board statement. The RBA, however, hiked rates three times so far in 2026. 

Officials also stated that “the Board is focused on its mandate to deliver price stability and full employment. It will do what it considers necessary to achieve that outcome, including increasing the cash rate target further if required.”

The decision to hold its fire in June, despite understanding the high risks, had to do with slowing Middle East tensions: The US and Iran had just signed a Memorandum of Understanding (MoU), declaring a 60-day ceasefire in which all parts involved were meant to negotiate a more sustainable peace.

But the MoU is now gone, as Washington and Tehran have been exchanging fire for almost two weeks, the Strait of Hormuz is once again closed, and talks are down the drain.

Back to the Australian employment-data release, the anticipated figures are unlikely to trigger a market reaction per se. The numbers are not enough to prompt an RBA repricing, as the focus remains on inflation rather than employment. The 4.4% Unemployment Rate is within what policymakers consider reasonable levels, and adding 15K new jobs, despite being a soft figure, would be far from concerning. 

A stronger-than-anticipated job creation number, coupled with a decreasing Unemployment Rate, hints at a tight labor market and hence could push the Aussie up amid fresh speculation for additional rate hikes. A dismal employment report, on the other hand, could help diminish concerns about the labor market’s strength, but it likely won’t be sufficient to consider a shift in the current hawkish monetary policy. In the near term, it could weigh on the AUD, but the Middle East conflict is likely to overshadow everything else.

When will the Australian employment report be released and how could it affect AUD/USD?

The ABS June employment report will be released early on Thursday. As previously noted, the Australian economy is expected to have added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%. Market participants will also be attentive to the breakdown of full-time and part-time positions. 

Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair hovers around the 0.7000 threshold ahead of the Australian employment data release, with gains beyond the level quickly resulting in retracements. So far this week, the pair peaked at 0.7026, but was unable to hold on to gains beyond the critical mark. Still, the pair is up for a fourth consecutive week.”

Bednarik adds: “The technical picture is neutral-to-bullish, according to the daily chart. The pair develops above a mildly bullish 20 Simple Moving Average (SMA), which provides dynamic support at around 0.6445. The 100 SMA stands directionless at around 0.7050, providing strong resistance should the pair gain upward momentum. Finally, technical indicators remain directionless, although well above their midlines, which skews the risk to the upside.”

RBA pause risks build as Australia jobs data seen undershooting

Analysts at Brown Brothers Harriman expect Australia’s June labor force survey, due Thursday, to show a cooling in momentum, with the economy “projected to add +15k jobs vs. +40.3k in May” and “the unemployment rate … unchanged at 4.4% for a second straight month.” They note that such an outcome “would be marginally higher than the RBA’s June unemployment rate projection of 4.2% and support the case for an extended pause to the bank’s tightening cycle.”

BBH underscores that the policy backdrop is already restrictive, pointing out that “the RBA projects real GDP growth to be below potential over the next two years” and that “the RBA cash rate at 4.35% currently sits near the top of the range of model-based central estimates of the nominal neutral rate.” While “RBA cash rate futures imply 60% odds of one final 25bps hike by year end to 4.60%,” the bank argues that “the risk is skewed towards a more extended pause in the RBA tightening cycle,” a stance it sees as “a headwind for AUD.”