HELEN KEVANS, ECONOMIST, JPMORGAN
"The most interesting thing about these numbers is the loss in employment was fully attributed to the full-time component, which represents the casualisation of the workforce that we tend to see in period of economic weakness.
"What we're likely to see going forward is a lot of full-time job losses rather than an increase in part-time jobs."
"This survey alone will have no implications for the RBA, but if we see a sudden rise in unemployment over the next few months, and if it were to hit the 7 percent handle by the end of Q3, then the RBA would probably respond with another rate cut before the end of the year."
MICHAEL BLYTHE, CHIEF ECONOMIST, COMMONWEALTH BANK
"Employment is still in very modest declines relative to expectations six months ago, so it's not a particularly bad number. It will add to the speculation that we may see imminent rate hikes here in Australia.
"We think the government's forecast for unemployment to peak at 8.5 percent is too pessimistic. We think it will peak at around 7 percent by early 2010.
"We have got the first rate hike of 25 basis points pencilled in for the third quarter 2010. There may be one more rate cut of 25 basis points for a confidence type boost as unemployment rises."
BESA DEDA, CHIEF ECONOMIST, ST GEORGE
"On the face of it, it seems quite resilient. I think if you look into the data, full-time employment is still deteriorating and part-time employment is really holding up the overall number, so that could be some evidence of under-employment occurring.
"But certainly the unemployment rate hasn't risen to levels that one would expect given the mix of negatives that have occurred so far. We had a range of 8-9 percent for next year as the peak. We probably think it will come close to the bottom of that range, maybe even slightly under given what's happened so far.
"But I still think the prospect is for the unemployment rate to rise. We think the RBA is on hold now and the next move in rates will be up, but not until next year."
WARREN HOGAN, AUSTRALIAN ECONOMIST, ANZ
"Overall, it's little bit weaker than expected. It certainly doesn't change the ambiguity that we have around the way the market is going. It's clearly soft, but it's performing a lot better than you would expect it in a recession.
"With this sort of a number, it would keep the market thinking that there is a risk that the next move is down. So I think you are still going to see the market pricing some small chance of an easing sometime over the next six months."
BACKGROUND:
- The median forecast had been for a fall of 25,000 in employment in June, while estimates for this volatile series ranged from no change to a drop of 40,000.
- The jobless rate was seen climbing to a six-year high of 5.9 percent, while estimates ranged from 5.7 percent to 6.1 percent.
- Employment has surprised by its resilience in the past couple of months with firms seemingly reluctant to fire skilled labour and instead shifting people to part-time work.
- Yet the jobless rate continues to climb as more people enter the workforce, keeping the participation rate near historical highs.
- The government still expects unemployment to peak around 8.5 percent next year, but recent data has held out the hope it might not climb that far.
- This is crucial for monetary policy as the faster and higher unemployment rises the more pressure there will be for further rate cuts. Also, the RBA has never begun tightening when unemployment was still rising.
Reuters