The Australian Bureau of Statistics (ABS) announced that the number of unemployed in Australia fell by 40,900 in July, while analysts had expected an increase of 25,000.
The unemployment rate fell to 3.4% in July as the labor force participation rate declined from 66.8% in June to 66.4% in July.
The Australian dollar weakened to 69.35 cents after the release of Australian labor market data. Meanwhile, Australian government bond yields moved slightly.
Analysts predict that the weak employment figures will not deter the Reserve Bank of Australia from its efforts to raise interest rates to curb inflation. However, they may prompt the central bank to consider raising interest rates by just 0.25% at its September meeting. This followed the 0.50% rate hike to 1.85% at the August 2 meeting.
The Australian Bureau of Statistics reports that inflation in Australia is now 6.1% year-on-year, the highest level since December 1990.