Unemployment Hits 4.3% – Are Rate Cuts Now Locked In? | Property Insiders

Key takeaways
The unemployment rate rose slightly from 4.1% in May to 4.3% in June—an increase of 0.2% or about 34,000 more people unemployed.
Despite the uptick, 4.3% remains historically low, especially when compared to expectations when interest rates began rising in 2022.
With the jobs market softening and inflation showing signs of easing, market sentiment is leaning toward a rate cut in August.
Dr. Wilson is confident the RBA will cut rates next month, even though the broader economy remains resilient.
Retail turnover rose 0.2% in May, up 3.3% over the year despite cost-of-living pressures and subdued migration.
The growth was driven by a rebound in clothing sales, though spending on food and household goods was more cautious.
Well, here we go again – the media is in a frenzy.
Australia’s unemployment rate just nudged up to 4.3%, and suddenly the headlines are screaming that the sky is falling.
But hang on – isn’t 4.3% still historically very low? And hasn’t our jobs market been remarkably resilient in the face of rising interest rates and cost-of-living pressures?
That’s what I wanted to discuss in this week’s Property Insider chat with Dr. Andrew Wilson, and we unpack what this really means.
Are we starting to see cracks in the economy? Or is this just the natural ebb and flow as our economy rebalances post-pandemic?
And perhaps the bigger question everyone’s asking… Does this mean the Reserve Bank is now locked into cutting interest rates in August?
Is that the lifeline property investors and homeowners have been waiting for? Or is it yet another case of media hype getting ahead of the data?
 
A slight rise, but still remarkably low
The Australian Bureau of Statistics (ABS) reported that unemployment increased from 4.1% in May to 4.3% in June.
That’s a rise of 0.2%, with 34,000 more people unemployed over the month.

Watch this week’s Property Insider chat as Dr. Andrew Wilson explains that a 4.3% unemployment rate is still very low by historical standards.
In fact, it’s well below the levels economists feared when interest rates started climbing back in 2022.
Over the past year, jobs have grown by 286,300 (a 2.0% increase), while the participation rate – the proportion of people in work or actively seeking work – remains near record highs at 67.1%.

This tells us something important: the Australian jobs market may be easing slightly, but it’s far from collapsing.
Employers are still hiring, and Australians are still confident enough to participate in the workforce.
As you can see from the chart below, Queensland and WA had the lowest jobless rate at 4.1%.

With this slight uptick in unemployment, many are now claiming a rate cut in August is “all but guaranteed.”
Dr. Wilson believes rates will be cut in August despite the fact that there are still plenty of signs that the economy remains resilient.
Of course, this will only be positive for the housing markets as well as supporting a strong labour market.
May retail sales higher
Watch this week’s Property Insider show as Dr. Andrew Wilson reports that retail sales – often a key indicator of consumer sentiment – rose 0.2% in May and are up 3.3% over the year.
This is despite cost-of-living pressures, higher interest rates, and a slowdown in migration.

According to the Australian Bureau of Statistics (ABS) this rise followed a flat result the previous month and a 0.2% increase in March.
The increase was primarily driven by a rebound in clothing purchases, while other categories like food and household goods saw more restrained spending. 

And of course, lower interest rates would certainly fuel more spending.

Seller’s auction markets prevail as school holidays end
In this week’s Property Insiders show, Dr. Andrew Wilson reports that capital city home auction markets have continued to deliver strong results that favour sellers as the mid-year school holiday period comes to a close.
National auction clearance rate rose to 70.2%, showing continued strength across capital cities.
Clearance rate improved from 67.9% last week and 58.2% same time last year.
Market activity expected to rise post-school holidays with more listings and buyer options.