The Australian dollar is unable to find a direction today, hovering around the 0.64.5c mark after yesterday’s job numbers showed the biggest fall in history for the Australian economy as the country tries to come to terms with the devastating effects of the coronavirusThe unemployment figure jumped to a mind blowing 594,300 in April, which was above analysts’ expectations for a figure of 575,000 but the surprise was the unemployment rate which hit the market at 6.2% while the market had been expecting a figure of 8.3%.
Analysts put the lower than expected figure down to the strange way how the jobless rate is actually calculated and noted that without these primitive calculations the figure would have been 9.6% which was a lot higher than expected.
The total number of hours worked also tumbled by 9% over the last month, which had a huge effect on productivity in the economy.
“This measure captures the massive loss of jobs, stood-down workers and the cut-back in hours,” said NAB economist Kaixin Owyong. “Total hours worked best captures the unprecedented economic shock to households. This hit will limit the bounce-back in spending and activity as the economy recovers, even with the dramatic increase in government assistance.”
Comments by the U.S. Federal Reserve Chairman Jerome Powell also helped support the US dollar against the Aussie when he dismissed speculation that the US central bank will adopt negative interest rates if need be to overcome the effects of the coronavirus and get the US economy back on track.
