Last week, After the release of strong domestic employment data figures, the Australian dollar surged back towards parity with its US counterpart.

The Australian dollar had risen to 99.54 US cents in late afternoon trading. Just before the data was released, it was trading at 98.97 US cents.

The Australian Bureau of Statistics had recently released employment data that showed there were 38,900 more people who had found jobs in May.

However, there was an increase of 0.1 per cent to 5.1 per cent in the unemployment rate, as economists had forecast.

According to HSBC chief economist Paul Bloxham, this rise is due to an increase in the participation rate, as the percentage of the population either working or looking for work has risen by 0.3 per cent to 65.5.

This figure indicates that the Australian economy was performing better than many people believed. Figures showed that Australia’s economy is growing at 4.3 per cent a year, the fastest of developed nations.

The Australian shares had also jumped for the third consecutive day after the strong employment growth indicated an upbeat picture of the local economy.

At the close, the benchmark S&P/ASX200 index had climbed up by 1.31 per cent, or 53.3 points, to 4,108.60, bring weekly gains to 1.1 per cent.

There was also an increase of 52.0 points, or 1.27 per cent, at 4,156.7 in the broader All Ordinaries index. This represents a gain of about $16.8 billion on the day.

On the ASX 24, the June share price index futures contract surge to 53 points higher at 4,115 with 31,914 contracts traded.

Su-Lin Ong, RBC senior economist, stated that the labor force data was impressive in both the main figures and details of Australia's employment situation.

Ong said, "The headline came in well above expectation at almost 40,000 (jobs)", adding that the details were good as well, as there were a rise in full time jobs of around 40,000.”

“The key is the unemployment rate - while it was up a bit - shows that unemployment has been between 5 and 5.3 (per cent) for almost 12 months now,” Ong explained.

"That's almost full employment, and it's broadly consistent with some of the GDP data that we've seen this week."


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