RBA pressure to lift rates; Albo’s new workers’ court; Tesla sales up, profits down
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What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use today. A surprise jump in the number of employed Australians puts pressure on the Reserve Bank to lift interest rates. The ALP promises a new workers' court for employees and a Michelin star restaurant. gets done for serving ants on sorbet. It's not a sentence I thought I'd ever say. Plus, Macquarie boss Shimara Wickramaniaka says it's time to step down. And Tesla sells more cars than ever, but profits fall. It's Friday, the 24th of July, 2026. I'm Michael Thompson, and good morning, Sean Aylmer. Good morning, Michael. Sean, the main story this morning, a surprisingly strong employment gain of 76,300 jobs last month will keep the pressure on the Reserve Bank of Australia to lift interest rates.
The unemployment rate was unchanged at 4.4%.
How did a surprise 76,300 jobs gain put pressure on the RBA to lift interest rates?
The jobs growth comes as more people look for work. The participation rate has turned up in recent months and at 67% is now at a 12-month high. The employment-to-population rate is also rising broadly. The economy is doing a good job at finding work for people.
Exactly, Michael. Yesterday's Bureau of Statistics numbers will certainly have the Reserve Bank on edge since May growth was also revised upwards. So you add that to the June figures. Hmm. The board announces its next interest rate decision on August 11, and after yesterday's data, it will be worried about wage pressures pushing up inflation, and it will be more confident about consumer spending. You know, if people have a job, more likely to spend money. It means the central bank might think that it can lift rates for a fourth time this year without worrying too much about the economy going into a slump. All eyes will now be on next week's June quarter consumer price index. It will make or break the case for an August rate rise.
You and I have been hanging around too much lately because I want to now dig into the numbers a little bit more. What have you done to me? Because yesterday's numbers, it sounds like they do add to that argument to lift rates. But the thing is not all of the jobs were full-time. A big chunk of them, 47,000, were part-time. And the underemployment rate, which is a measure of people not getting as much work as they'd like, that was also slightly higher too. Don't you go all economist on me, Michael Thompson. I'm sorry. Someone has to, Sean. Time for me to get serious.
I mean, it's fair to say the labour market is stable. Maybe it's even cooling a bit. Maybe. It's certainly not weakening sharply or anything like that. Maybe the three rate hikes we've already had this year is cooling the employment market. It's broadly increasing in line with population growth and unemployment remains low by historical standards. That kind of suggests the economy has adjusted pretty well to the higher rates in a fairly orderly way. Now, that would give the Reserve Bank comfort because the big risk is that monetary policy kind of culls the economy quickly. That's not happening. Having said that, it takes time for interest rates to filter through. So still a lot of uncertainty there. What's a little worrying, I think, for those who don't want higher interest rates, which is probably most of us, is that in a speech from Reserve Bank Assistant Governor Sarah Hunter recently, she talked about maybe we need a period of higher unemployment to bring inflationary expectations down.
If they start drifting up, if you want to take that on face value, you'd have to think that the bias is well and truly towards a rate hike.
Yeah. And look, if I'm not the only one out there who's interested in employment data, Again, just sentences that I never thought would come out of my mouth today on this show. On the week ahead, at the start of this week, Stephen Koukoulis and I took a deep dive into what employment numbers mean and all those different components. Underemployment, the participation rate, the part-time versus full-time split, all of those things. And Stephen, just as he always does, a fantastic job of explaining it.
What do the unemployment, participation and underemployment rates reveal about the labour market?
So you... You're actually mirroring Stephen Kikoulis.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:06–0:59
2
How did a surprise 76,300 jobs gain put pressure on the RBA to lift interest rates?
0:59–4:27
3
What do the unemployment, participation and underemployment rates reveal about the labour market?
4:27–6:17
4
How might upcoming CPI data influence the RBA's August decision?
6:17–17:24
Speakers
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