June Jobs Soft, Cut Priced

• The June labour force report came in on the softer side. Employment increased by just 2.0k after a 1.1k decline in May, marking a second consecutive month of weak jobs growth.
• The unemployment rate rose to 4.3 percent, reaching the peak anticipated the RBA for this cycle. Although monthly data can fluctuate, the upward move in the trend unemployment rate to 4.2 percent signals a gradual loosening in the labour market.
• Following the release, markets shifted to fully price an August rate cut, up from around 90 percent beforehand.
• While the RBA has indicated it will proceed cautiously with easing, the data reinforces the view that labour conditions are no longer overly tight. This was the last jobs report before the 12 August meeting, with Q2 CPI on 31 July now the next major data point.