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Australia July jobs data eyed as banks diverge on the outlook
Westpac forecasts 15k employment growth and a 4.4% unemployment rate, while CBA expects a flat print after June’s 76.3k surge.
Australia’s July employment report is set to be a key focus for currency traders, with Westpac and the Commonwealth Bank of Australia offering contrasting previews after a volatile labor market run. Westpac expects a modest 15k employment gain and an unemployment rate around 4.4%, while CBA forecasts a flat outcome and argues June’s surprise 76.3k jump overstated underlying momentum.
Forexlive reports that a weaker-than-expected jobs print would align with the Reserve Bank of Australia’s view that the labor market is gradually cooling. That scenario could support expectations for a pause or a slower pace of additional rate hikes, which would likely weigh on the Australian dollar.
By contrast, a stronger outcome closer to Westpac’s forecast could complicate that cooling narrative and encourage markets to price a higher probability of further tightening. Both banks also point to the participation rate as a cleaner read on underlying strength, given concerns that the headline employment number contains more population-related noise.
Westpac expects the participation rate to ease slightly to 66.9% from 67.0%, with unemployment broadly steady. CBA, meanwhile, expects unemployment to rise toward a 4.7% peak by late 2027, suggesting a multi-year softening path rather than a sudden change in the RBA’s policy direction.