HSBC: Australian jobs market improving : Unemployment rate falls further

Australia's jobs numbers surprised the market significantly to upside. Employment rose by +42k in May (market had +15k) and the unemployment rate fell to 6.0% (market had 6.2%). Most importantly, it is becoming increasingly likely that the unemployment rate may have passed it peak. In previous cycles, this has marked the turning point for the cash rate cycle. The challenge this time around has been that the end of the mining boom has made this cycle very different to previous ones and the monthly labour force survey has also suffered significant measurement issues in recent times. Nonetheless, the weight of evidence is beginning to suggest that the labour market is genuinely improving. We expect the RBA to remain on hold in coming quarters.