Australian Employment Preview: Largest monthly decline on record – Wells Fargo

On Thursday, the Australian employment report will be released. Market consensus point to a decline in employment of more than 550K, the worst monthly number on record. According to analysts at Wells Fargo, the Reserve Bank of Australia will stay on hold despite the softness in the labor market. 

Key Quotes: 

“Australia’s April labor market report should provide the first concrete evidence of the negative impact of COVID-19 on the economy. The activity data so far in 2020 have shown little negative effect and, in fact, March retail sales showed a pre-COVID surge in spending. However, a sharp decline in March business sentiment portends significant economic weakness in Q2, which should be clearly reflected in the April job figures.”

“The consensus expects April employment to fall 550,000, which would easily be the largest monthly decline on record, while the unemployment rate is expected to jump to 8.3% (from 5.2% in March). In addition to these headline figures, the split between fulltime and part-time jobs, and the change in total hours worked, will provide further insight into just how soft the labor market was in April. That said, despite the softness in the labor market and economy, we expect monetary policy to stay on hold for now.”