THE TAKEWAY: Australian labor market made little progress, slightly declined > A weakened job market provides confirmation of economic weakness > Australian Dollar rallied after declining since Aug 9
The Australian labor market shed 8,800 jobs in August. Part time workers employed declined by 9,300 and the full time labor market gained 600 jobs. Overall the unemployment rate declined by a tenth of a percent to 5.1 percent while the participation rate, which measures the proportion of total population employed or looking for employment, declined to 65 percent in August, down from 65.2 percent in July.
The weakened Aussie labor market should definitely be cause for concern as it likely serves as confirmation that the global slowdown in both Europe and China appears to have proliferated. Employers will typically reduce the rate at which they hire as the slowing in the economy progresses.
The Aussie currency traded higher versus the U.S. Dollar on the release even though the data provided confirmation of possible economic weakness. Perhaps the rally was the result of easing selling pressure as the AUDUSD has recently declined 4.23 percent since August 9.
AUD/USD, 5 Minute Chart