The S&P/ASX 200 Index (ASX: XJO) dropped more than 0.2% at 11:30am AEST.
That's when the Australian Bureau of Statistics (ABS) released the latest unemployment figures for March.
Here's what the ABS reported.
Low jobless rate pressuring the ASX 200
Consensus estimates had expected the unemployment rate in Australia to tick up from the historic low level of 3.5% posted in February.
That did not eventuate, with the jobless rate remaining at 3.5% in March.
Among other key statistics, the ABS reported that:
- The participation rate increased to 66.8%
- Employment increased to 13,883,100
- Employment to population ratio remained at 64.4%
- The underemployment rate increased to 6.1%
- Monthly hours worked increased to 1.91 billion
In a case of good news (Who doesn't like a strong labour market, after all?) being bad news, the ASX 200 slipped on the report.
That's because a tight labour market is likely to put upward pressure on wages, adding fuel to the simmering inflation fire.
This in turn increases the odds of at least one more interest rate hike from the Reserve Bank of Australia. The RBA's next rate decision is due on 2 May. And higher rates, as you're likely aware, tend to throw up headwinds for most ASX 200 shares.
What else are investors considering today?
In other macroeconomic news impacting share markets, ASX 200 investors also awoke this morning to the latest March Consumer Price Index (CPI) data out of the United States.
As The Motley Fool reported earlier here, CPI in the world's top economy slowed to 5% in March, down from 6% in February.
While slowing inflation is good news, CPI in the US remains far above the Federal Reserve's 2% target range, meaning another rate hike is also likely from the US central bank next month.
And core CPI – which strips out volatile items like energy and food – actually edged higher in March to 5.6%.
With unemployment in the US also still down at a rock bottom 3.5%, US stock markets and the ASX 200 all reacted negatively to the news.
