ASX hits intraday high after latest unemployment data

The Australian Bureau of Statistics (ABS) reported Australia’s unemployment rate for August on Thursday, September 15th. The seasonally adjusted unemployment rate rose surprisingly to 3.5 percent in August 2022, higher than the expected 3.4%.

According to the reading, Australia's strong economy is luring more workers into an extraordinarily tight labour market with full-time employment jumping by 58,800 in August, offsetting a drop of 25,300 in part-time jobs. Seasonally adjusted working hours also increased by 0.8 percent, fully reversing July's decline in hours worked.

What would be the impact?

The surprising job data comes as the RBA considers the possibility of another 50 bps hike for October, following the US's hotter-than-expected CPI. Up until September 14th, the market has indicated a 67% expectation of an interest rate increase to 2.85% (another 50bps) at the next RBA Board meeting.

The RBA has delivered four consecutive 50 bps increases since May, but governor Philip Lowe has recently signalled that the board could ease higher interest rates from October if the economic data supports the pivot.

Given the unexpected lift in the unemployment rate, suggests the labour market may have reached its total capacity thus allowing this to be possible.

ASX 200 technical analysis

The encouraging unemployment print helped to restore confidence in the ASX market after the previous day’s tumble. As shown in the daily chart, the level of 6791 has played as massive support since early September. Therefore, sellers should keep a close eye on this level once breached as that may trigger a new round of selling. On the other hand, buyers should be ready for any bounce from this level to be challenged by the imminent resistance at 6916, where the 20-day MA sits.

ASX 200 daily chart