By Swati Pandey
SYDNEY, July 18 (Reuters) - Australian full-time employment surged in June but the jobless rate stayed stuck at 5.2% as more people looked for work, a sign of spare capacity that argues for more policy stimulus.
The Reserve Bank of Australia (RBA) is closely watching the monthly employment series as it is counting on labour market strength for a long-awaited pick up in wage growth and inflation.
The RBA has recently estimated that the jobless rate will need to fall to 4.5% to generate any wage pressures. To help achieve that level it chopped interest rates twice since June to a record low of 1% as the economy grapples with falling home prices and miserly consumer spending.
Economists expect another cut later this year, probably by November while some are predicting policy at 0.5% in 2020 as the RBA steps up efforts to revive growth in Australia's A$1.9 trillion economy which has slowed to decade lows.
Getting unemployment to 4.5% looks like a tough task as Thursday's data showed it held at 5.2% in June even though 21,100 full-time jobs were created in the month. The jobless rate got as low as 4.9% in February but has since been nudging higher.
That upturn has come even as hiring remained solid. Overall, net 500 new jobs were created in June, disappointing economists who were looking for a rise of 10,000.
The slowdown was led by a massive fall in part-time jobs which had jumped in May largely due to temporary hiring for the Federal elections that month.
Overall annual employment growth of 2.4% handily outpaced the U.S. performance of 1.6%.
Yet a constant influx of skilled migrants means the labour force is also expanding rapidly. Australia's annual population growth of 1.6% is among the highest in the developed world.
Participation stayed at a record peak of 66.0% in June, meaning nearly two of every three people are currently participating in the labour market.