Jobs growth expected to be modest

Unemployment is tipped to have lifted slightly in June, though NAB warns the official figures could be weaker than most expect.

Source: AAP

Jobs growth is tipped to be have been modest in June, taking the unemployment rate slightly higher.

The number of Australians with a job is expected to have risen by 13,500 in June, after increasing by 17,900 in May.

The unemployment rate is forecast to rise to 5.8 per cent, from May's 5.7 per cent, according to an AAP survey of 10 economists.

"We expect a "business as usual" report, with annual employment growth remaining around two per cent per year as suggested by various job vacancies series," TD Securities chief Asia-Pacific macro strategist Annette Beacher said.

"The RBA will be content if the unemployment rate remains around 5.8 per cent, as we expect."

National Australia Bank economist Tapas Strickland warned the jobs numbers could prove disappointing, as the Australian Bureau of Statistics rotates new households into their sample for the labour force survey.

However, NAB continues to assess the labour market as broadly positive, with the bank's employment index pointing to employment growth of 15,000-18,000 a month, and SEEK job ads also picking up a little in recent months.

Mr Strickland said it is unclear how the RBA would interpret below consensus June employment figures.

"With non-mining GDP growing at an above trend rate and with business conditions above average, it is likely the RBA would need a run of weak employment numbers to conclude the labour market is weakening," he said.

Weaker than expected employment numbers could raise market expectations of an RBA cash rate cut, which could push the Australian dollar lower, Mr Strickland said.

The participation rate, which refers to the number of people either employed or actively looking for work, is expected to have held steady at 64.8 per cent in June.

EMPLOYMENT GROWTH STEADY IN JUNE

* Unemployment rate forecast to rise slightly to 5.8pct in June

* Number of people with jobs tipped to rise by 13,500

* Forecast participation rate of 64.8pct

(Source: AAP survey of 10 economists)