The economy added 58,200 jobs last month. Economists had tipped employers would have added 20,000 positions.

The 4.2% jobless rate is the highest since January 2022. Still, March aside, the economy has added jobs every month this year, with the monthly average topping 40,000.

The participation rate, which gauges the share of the working age population in the workforce, clicked higher to a record 67.1%.

“Although the unemployment rate increased by 0.1 percentage point in each of the past two months, the record high participation rate and near record high employment-to-population ratio shows that there continues to be a high number of people in jobs, and looking for and finding jobs,” said Kate Lamb, the head of labour statistics at ABS.

“While unemployment increased to 637,000 people in July, the highest it has been since November 2021, it remains around 70,000 people below its pre-pandemic level,” she said.

The number of hours worked nudged o.4% higher, to 1.961bn, the ABS said.

The labour market figures will be closely watched by the central bank as it considers whether inflation can remain on a downward track towards its 2%-3% goal while retaining as many job gains as possible.

The RBA expects the jobless rate to rise to 4.3% by December, a level that it would consider to be close to full employment.

Prior to the release of today’s labour market figures, investors were rating the chance of an RBA rate cut of 25 basis points to 4.1% when its board next meets on 23-24 September as a 50-50 chance. Markets were also fully pricing in the odds of such a cut by the bank’s final meeting of the year in December, according to the ASX rates tracker.

The Australian dollar gained about a quarter of a US cent to 66.05 US cents on the news. Stocks, though, erased most of their gains for the day as investors pared their expectations an RBA interest rate cut might be just around the corner.

More soon.