Australia's July employment report lands today, with Westpac and Commonwealth Bank of Australia (CBA) offering opposing forecasts. Westpac expects a modest 15k hiring gain while CBA sees a flat print, and the divergence centers on whether June's 76.3k surge reflected genuine momentum or a one-off statistical swing.
Banks split on July's employment print
Westpac and CBA both frame June's 76.3k jump in employment as an outlier after a choppy run — April fell 38.6k and May rose a more modest 44.0k. The swings have made the underlying trend hard to read, and the two banks have landed in different places for July.
The bank has penciled in a further 15k rise in employment, with the participation rate easing to 66.9% from June's 67.0% and unemployment holding at 4.4%. Westpac flagged that some of June's strength reflected people who already had a job lined up in May finally starting work in June, a pattern the Australian Bureau of Statistics itself highlighted, and pointed to a recent sharp rise in underemployment as a possible early sign of slack building in the market.
CBA takes a more cautious view. It forecasts flat employment for July and warns that Census-related workforce effects could add noise to hours worked in the release. The bank argues June's surge and its accompanying jump in participation likely overstated genuine labour market momentum, pointing to survey volatility as the driver, and says its own internal data show no evidence of a material reacceleration in hiring.
What it means for the RBA and the Australian dollar
A soft jobs print would reinforce the Reserve Bank of Australia's view that the labour market is gradually cooling, supporting the case for a pause or a slower pace of further rate hikes and likely weighing on the Australian dollar. A stronger outcome, closer to Westpac's forecast, would complicate that narrative and could see markets price in a higher chance of further tightening.
CBA expects slower economic growth to gradually push unemployment toward a 4.7% peak by late 2027, a multi-year softening path rather than an abrupt shift. That means today's single data point carries less weight for the RBA's interest rate trajectory than the trend across coming months. Traders will likely watch the participation rate most closely as a cleaner read on underlying momentum, since both banks flag population-related noise in the headline employment figure.
Source: Investinglive
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