ASX closes at a fresh record as unemployment rises
The Australian share market closed at a new record high as the September jobs data sparked renewed bets on further interest rate cuts from the Reserve Bank of Australia (RBA). The S&P/ASX 200 finished up 77 points, or 0.86%, at 9,068.40, topping the previous record high and signaling investor optimism despite a weaker economy on paper.
What drove the rally?
Investors priced in the potential for more aggressive easing from the RBA after unemployment jumped. The official figures showed a rise in the jobless rate to 4.5%, a level last seen during the Covid era. While participation remained high, employment growth slowed, and underemployment ticked higher, creating a perception that rate cuts could revive growth and support earnings.
Market breadth and standout stocks
amp-led gains and commodity strength underpinned the upside. Among the top performers, AMP rose about 8.5%, while gold miners benefited from bullion trading above US$4,200 an ounce. Genesis Minerals also posted a strong day, highlighting demand in resources and materials as financial sentiment improved.
The rate-cut narrative
Bond markets reacted quickly to the labour data, with one-day declines in yields suggesting investors expected lower borrowing costs ahead. A rough 70% probability of the RBA delivering its fourth cut this year pushed the cash rate toward 3.35%. The direction of yields and the pricing of rate cuts hinge on inflation trajectories and the persistence of weaker employment signals beyond a single data release.
Implications for households and the broader economy
ACOSS warned that rising unemployment threatens household finances, particularly for those relying on jobseeker payments. Economists stressed that while the unemployment figure is not catastrophic by historical standards, the trend toward slower hiring could influence consumer spending, real wages, and housing demand. Yet, some analysts argued that a lower-for-longer rate environment could support property markets and construction activity in the near term.
Analyst perspectives
Across the pundit landscape, opinions were split but leaned toward continued easing. HSBC’s Paul Bloxham noted the data as a downside surprise that strengthens the case for further RBA cuts. IG’s Tony Sycamore described the unemployment uptick as placing the RBA in an awkward position, potentially accelerating policy easing if inflation pressures soften. Other voices cautioned that a robust immigration tailwind and steady participation could temper the impact of higher unemployment on the broader economy.
What’s next for investors
Markets will watch the next round of inflation data and employment metrics to assess whether rate cuts can sustain a rally in equities and support credit markets. Traders will also monitor global developments, currency moves, and commodity prices as they weigh the odds of additional stimulus against the risk of reignited inflation.
Key data snapshot
ASX 200: around 9,068 points at close; Australian dollar softens; spot gold and Brent crude price actions continued to reflect mixed macro signals. The broader market mood remained constructive as investors sought value in cyclical and material stocks amid higher unemployment readings.
