💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

UPDATE 1-Australia's labour market resilient, keeps jobless rate low at 5.7 pct

Published 19/05/2016, 12:45 pm
© Reuters.  UPDATE 1-Australia's labour market resilient, keeps jobless rate low at 5.7 pct

* April employment rises 10,800 vs increase of 12,500 forecast

* Increase in part-time jobs drive overall gains, full-time falls

* Outcome still in line with RBA expectations (Adds economist's quote, details and context)

By Ian Chua

SYDNEY, May 19 (Reuters) - Australia's unemployment rate stayed at its lowest in nearly three years for a second month in April, a testament to the resilience of the labour market though a slight miss in monthly job gains prompted a brief selloff of the local dollar.

Thursday's report from the Australian Bureau of Statistics showed the jobless rate was unchanged at 5.7 percent in April, when the median forecast had been for a rise to 5.8 percent.

The unemployment rate has been around 5.75 percent in recent months, having been as high as 6.25 percent last year.

The outcome was in line with the Reserve Bank of Australia's (RBA) own expectations. It sees the unemployment rate remaining around the current rate until mid 2017, before declining gradually as economic activity strengthens.

The April employment result also means the central bank will keep its focus on how inflation develops before deciding on whether to ease policy again.

Earlier this month, the RBA reduced its cash rate to a record low 1.75 percent, citing surprisingly low inflation as its main concern.

"April's labour market data are unlikely to prompt the RBA to follow May's rate cut with another reduction at the next meeting in June - we still think the next cut will come at the August meeting," said Paul Dales, Australia & New Zealand economist at Capital Economics.

"That said, we are becoming more concerned about the quality of the jobs being created."

Indeed, while a total of 10,800 net new jobs were created in April - slightly undershooting forecasts of 12,500 - the breakdown was disappointing. Full-time employment fell 9,300, while part-time rose 20,200.

The Australian dollar AUD=D4 , already under pressure against a resurgent greenback, dipped to a two-and-a-half month low of $0.7209 AUD=D4 . It has since recovered to be just a touch softer on the day at $0.7223.

Annual jobs growth was still a healthy 2.1 percent, though it has slowed from the strong average pace of around 2.5 percent in the past two quarters.

Underpinning labour demand has been slow wage growth, which reduces cost pressures for businesses.

Government figures on Wednesday showed wages grew at their slowest pace on record last quarter with a mere 0.4 percent increase. That took the annual rate down to 2.1 percent, a record low as well. leading indicators of employment have also been encouraging. A closely watched survey by the National Australia Bank earlier this month showed businesses' hiring intentions stayed above their long-run averages in April, suggesting ongoing resilience in the labour market. (Editing by Shri Navaratnam)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.