The head of labor statistics for the office, Bjorn Jarvis, said there were two factors at stake in the outcome.
“The large drop in the unemployment rate this month reflects more people than usual entering employment and also a lower-than-usual number of employed people staying unemployed,” he said.
“Overall, these flows reflect an increasingly tight labor market, with high demand for hiring and retaining workers, as well as a continuing shortage of labor.”
The result increases pressure on the Reserve Bank, which was expected to raise official interest rates at its August meeting by half a percentage point to 1.85 percent.
Overnight, Canada’s central bank raised rates there a full percentage point to 2.5 per cent. Central banks in New Zealand (2.5 per cent) and South Korea (2.25 per cent) this week have also sharply raised their central debt rates in the face of high inflation and tight labor markets.
Capital Economics senior economist Marcel Thieliant said the unemployment rate could soon drop to 3%. He said the figures would also force the Reserve Bank to move more aggressively.
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“The sharp fall in the unemployment rate in June is consistent with our view that the Reserve Bank of Australia will have to tighten monetary policy more aggressively than most anticipate,” he said.
The participation rate rose 0.1 percentage points to 66.8 percent and is almost one full percentage point higher than at the start of the pandemic in March 2020.
The underemployment rate rose 0.3 percentage points in June, but remains 2.7 percentage points lower than its March 2020 rate.
The underemployment rate, the combined number of unemployed or underemployed people, remained at 9.6%, and is 4.6 percentage points lower than at the start of the pandemic.
NSW and Victoria hit record low unemployment rates in June. In NSW, the unemployment rate fell 0.7 percentage points to 3.3 per cent, and in Victoria it fell 0.5 percentage points to 3.2 per cent.
Queensland’s unemployment rate fell 0.1 percentage points to 4%, while Western Australia was the only state to see unemployment rise, rising 0.3 percentage points to 3.4%.
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