Australia’s labor market data proved disappointing: although the [B]Unemployment Rate[/B] remained unchanged at 5.8%, the economy shed 27,100 jobs in August, much more than economists expected. Worse still, the drop was driven by a -30.8k decline in full-time positions, marking the fourth consecutive month of large double-digit losses. More of the same is likely going forward: a survey of economists conducted by Bloomberg forecasts the jobless rate will rise to average 6.25% this year and 7.9% in 2010. Job losses will weigh on incomes and trim consumption, threatening Australia’s nascent economic rebound. Data released just yesterday revealed that retail sales unexpectedly fell in July as the impact of the government’s A$20 in cash handouts began to fade while higher borrowing costs undermined lending. Indeed, the past two days have amounted to a profound wake-up call for financial markets: traders that had been pricing in a 45% chance that the RBA will raise interest rates by 25 basis points in October just three days ago now see just a 16% chance of such an outcome.