- The Australian Unemployment Rate is forecast to remain unchanged at 4.2% in August.
- Australia is expected to have added 22,000 new positions in the month, following the 24,500 added in July.
- AUD/USD aims to extend gains beyond the 0.6700 mark ahead of the announcement.
Australia will release its August monthly employment report on Thursday at 1:30 GMT, and market participants anticipate yet another month of moderate growth in the labor market.
The Australian Bureau of Statistics (ABS) is expected to announce that the country added 22,000 new job positions in the month, while the Unemployment Rate is forecast to remain stable at 4.2%. The Participation Rate is also expected to remain unchanged at 67%.
Australian ABS reports both full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs imply working 38 hours per week or more, usually include additional benefits and they mostly represent 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.
Australian unemployment rate expected to remain unchanged in August
Employment figures are crucial in terms of monetary policy, as most central banks base their decisions on labor conditions and inflation levels. The Reserve Bank of Australia (RBA) is no exception. Policymakers met early in August, and the Board decided to lower the Official Cash Rate (OCR) by 25 basis points (bps) to 3.6% from 3.85%, explaining that, on the one hand, inflation has continued to moderate, while on the other hand, “labor market conditions have eased further in recent months.”
Indeed, recent employment-related data has been on the disappointing end, as data from the last few months have been quite soft. The economy lost 1,100 positions in May, added 1,000 in June, and gained an additional 24,500 in July, far below the 87,600 reported in April.
A loosening labour market is generally understood as negative for the economy, but it also means the central bank has no reason to keep interest rates at high levels. Most central banks have claimed that the strength of the sector has somehow limited their ability to further lower interest rates, and Australia is no exception.
Following the RBA’s announcement, the central bank released the Minutes of such a meeting, which showed the Board judged some “further reduction in the cash rate likely needed over the coming year,” while adding that incoming data would determine the pace of rate cuts. Policymakers also noted that the labor market remained a little tight, inflation was still above the midpoint, and domestic demand was recovering.
Other than that, it is worth remembering that Australia’s wage inflation is reported separately from the monthly employment data every quarter. According to the latest data available, the wage price index grew 3.4% on a yearly basis in the second quarter of 2025, the same rate of increase as seen in the three months to March, and slightly above the 3.3% anticipated. However, on a quarterly basis, the wage price index rose 0.8% in Q2, easing from the previous 0.9% and matching expectations.
With that in mind, the upcoming employment report will be read on how it could impact the upcoming RBA’s decisions. Stronger-than-anticipated job creation could boost demand for the Australian Dollar (AUD) as it would not only be positive for the economy, but also delay future interest rate cuts.
A weak employment report, on the other hand, should weigh the Aussie lower and leave the door open for additional cuts in the foreseeable future.
When will the Australian employment report be released and how could it affect AUD/USD?
The ABS August report will be released early on Thursday. As previously noted, the Australian economy is expected to have added 22,000 new job positions in the month, while the Unemployment Rate is foreseen at 4.2% and the Participation Rate at 67%.
In addition, the Federal Reserve (Fed) announced its decision on monetary policy following a two-day meeting. The central bank cut the benchmark interest rate by 25 basis points (bps), as expected. At the same time, the Summary of Economic Projections (SEP) anticipates two additional interest rate cuts this year, in line with the market’s expectations, while confirming investors’ speculation of three rate cuts before the year’s end. As a result, the US Dollar came under renewed selling pressure, helping AUD/USD extend its yearly advance.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair hit a fresh 2025 high of 0.6707 ahead of the release of employment data, but changed course afterwards. The near-term picture is bearish, with the 4-hour chart showing the pair piercing a bullish 20 Simple Moving Average (SMA) currently in the 0.6660 price zone. A firm recovery above the level should see the pair retesting the aforementioned yearly high ahead of the 0.6730 price zone.”
Bednarik adds: “The AUD/USD pair could ease further once below the initial support in the 0.6630 area, with 0.6590 coming up next.”
Economic Indicator
Employment Change s.a.
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.
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RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
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