• Australia’s unemployment rate is expected to remain stable at 4.2% in September.
• The employment change is expected to reach 25,000, the emphasis will be on details.
• AUD/USD is technically bearish, so any data-driven jump could attract sellers.

The Australian Bureau of Statistics (ABS) will release its monthly employment report on Thursday at 00:30 GMT. The country is expected to create 25,000 jobs in September. modern job positions, and the unemployment rate is expected to remain at 4.2%. The Australian Dollar (AUD) weakened against the US Dollar (USD) ahead of this event, with AUD/USD trading below the 0.6700 level.

The ABS reports employment change by separating full-time positions from part-time positions. By their own definitions, a full-time job means working 38 or more hours a week and usually comes with benefits, but mostly provides a steady income. On the other hand, part-time employment usually means a higher hourly wage but lacks consistency and benefits. Therefore, full-time jobs are more significant than part-time ones in determining the major path for AUD.

Back in August, the monthly employment report showed that Australia had managed to create 50,600 jobs. part-time positions, while losing 3.1 thousand. full-time positions, which resulted in a net change in employment of 47.5 thousand. The unemployment rate at that time remained at 4.2%.

Australia’s unemployment rate remains stable in September

As previously noted, financial markets expect the unemployment rate to be 4.2%. If this happens, it will be the third consecutive reading at this level. In the meantime, job numbers are expected to grow at a solid pace.

However, market players will pay more attention to details. Strong headline data in August showed that the majority of jobs created were part-time, while the country lost full-time positions. This is usually bad news for the economy, regardless of the amount. Nevertheless, this can be considered good news regarding the monetary policy update.

The creation of part-time jobs, generally understood as having lower wages and fewer benefits than their equivalents, is typically viewed as a weakness in the labor market.

The Reserve Bank of Australia (RBA) is in no rush to cut interest rates. The official cash rate (OCR) has held steady at 4.35% for almost a year as the labor market remains tight. This has indeed helped to bring headline inflation towards the RBA target to between 2% and 3%, with underlying inflation still high. In addition to easing inflation, the RBA requires a looser labor sector to ease monetary policy.

With this in mind, the keen rise in part-time employment in August has raised a glimmer of hope among those who expect the RBA to start reducing OCR soon. But the swallow makes summer. A one-sided macroeconomic report signaling the “right” direction is not enough. However, if September employment data points in the same direction, there is a good chance that market players will start pricing in an interest rate cut. Three reports in a row will be a paradise for pigeons.

Meanwhile, RBA Governor Michele Bullock reiterated after its September meeting that core inflation remains too high and that the time to cut interest rates has not yet come. For now, market participants are betting that the central bank will cut interest rates in February 2025.

When will the Australian jobs report be released and what impact might it have on AUD/USD?

The ABS will publish its September jobs report early on Thursday morning. As mentioned, Australia is expected to add 25,000 this month. modern job positions, while the unemployment rate is expected to be 4.2%. The participation rate is expected to remain at 67.1%.

Overall, a mighty report will strengthen AUD, even if more of the growth comes from part-time work. Any tender underlying is likely to raise hopes of interest rate cuts, but not enough to trigger a sell-off in the AUD. The reverse case is also true, where tender data puts pressure on the Australian.

Prior to the announcement, AUD/USD is trading a few pips below the 0.6700 level and is technically bearish.

Valeria Bednarik, Principal Analyst at FXStreet, notes: “The AUD/USD is trading below the 61.8% Fibonacci retracement of the 0.6621-0.6941 gains at 0.6743, which means there is a good chance that the pair will test the bottom of the range soon. The bearish scenario is also supported by technical indicators, as Momentum and the Relative Strength Index (RSI) are heading strongly south, well below the midlines on the daily chart, reflecting persistent selling interest. At the same time, the pair is currently struggling with a non-directional uncomplicated moving average (SMA) at 100, while the SMA at 20 is gaining bearish traction over 100 pips above the current level.

Bednarik adds: “AUD/USD may rise towards the previously mentioned Fibonacci resistance level following the bullish reports, but given the prevailing trend, sellers may take a chance once the dust settles. Short-term support is located at 0.6670 on the way to the 0.6620 price zone. A break below the latter should support a short-term extension towards a mighty unchanging support area around the 0.6570 level.