Australia's jobless rate stays low in March but Iran war risks loom
Here is a summary from Westpac:
Employment +17.9k (prior +49.7k), unemployment 4.3% (unchanged), participation 66.8% (from 66.9%). Full-time +52.5k, part-time –34.6k. Three-month-average annual employment growth lifted to 1.5%yr (from a 1.0%yr trough in January).
The survey (1–14 March) is the first hard data since the Middle East conflict began, but it is too early to reflect that shock or recent rate rises. The print was close to consensus (+20k) and Westpac (+25k). Westpac argues the data challenge the RBA's view that the labour market has "tightened a little recently" — lower unemployment around the turn of the year reflected temporarily weaker participation, not re-tightening.
Outlook: Westpac's baseline assumes an eight-week Strait of Hormuz closure, trimmed mean inflation peaking near 4%yr in H2, and three more 25bp RBA hikes (May, June, August). Labour-market effects should lag: unemployment is forecast to rise to a 4.9% quarter-average in H2 2026 and hold there through 2027, driven more by slower hiring than layoffs. Employers are likely to cut hours before headcount; manufacturing, construction, transport/logistics and travel/tourism are most exposed. Business and consumer confidence have already collapsed to pandemic-era lows, with April's job-expectations reading the worst since August 2020.
Inflation expectations also perked up.
The Australian dollar rallied against the US Dollar after the data release. Australian bond yields rose.