Labour Market Holds Firm Despite Employment Dip

• Australia’s May labour force survey was mixed. Employment fell by 2.5k (consensus: +21.2k), a modest pullback after April’s 87.6k surge.
• The participation rate eased to 67.0%, keeping unemployment steady at 4.1%. This result is broadly neutral for the RBA ahead of its July 8 meeting.
• The unemployment rate has now averaged 4.0–4.1% since March 2024, reinforcing the view of a stable, yet cooling, labour market.
• Markets are currently pricing in a 77% chance of a rate cut in July, with next week’s monthly CPI indicator now the final key input for the RBA’s decision.