Australia’s unemployment rate climbs to 4.5%; May flash PMI signals contraction, inflation expectations ease

[Data Concept]

Australia's seasonally adjusted unemployment rate rose to 4.5% in April, up from the previous month and exceeding Wall Street expectations of 4.3%. This marks the highest jobless rate since November 2021, with the number of unemployed individuals increasing by 33,000 to a total of 692,500.

Total net employment fell by 18,600 to 14.74 million, marking the first monthly decline in five months and reflecting a softening labor market as full-time employment gains (+10,700) were entirely offset by a sharp reduction in part-time positions.

Concurrent economic indicators for May further underscore cooling domestic momentum: The Judo Bank Flash Australia Composite PMI fell sharply to 47.8 in May from April's 50.4, signaling private sector contraction for the second time in three months.

The downturn was led by the services sector, where the PMI slid to 47.7, while manufacturing output decelerated to 50.3. Both sectors cited falling new orders and headcounts linked to supply chain disruptions from the Middle East conflict.

On a supportive note for policymakers, consumer inflation expectations fell to 5.6% in May from 5.9% in April. However, consumers remain highly cautious regarding sticky price pressures, particularly given volatile global crude oil prices.

The S&P/ASX 200 Index [https://seekingalpha.com/symbol/AS51] rose 1.41% to 8,641 by midday. The Australian dollar depreciated to around $0.71, reversing gains from the previous session.

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