SYDNEY: Australia’s unemployment rate dipped to 6.1 per cent in March, data showed Thursday, a better-than-expected reading that could ease pressure on the central bank to further cut interest rates.
The figure was down from a revised 6.2 per cent in February, as 37,664 positions were created, according to the Australian Bureau of Statistics. Analysts had forecast a reading of 6.3 per cent with 15,000 jobs added.
Full-time roles increased by 31,516 while part-time jobs rose 6,148. The participation rate, which measures the proportion of adults in work or looking for work, strengthened from a seasonally adjusted 64.7 per cent to 64.8.
The Australian dollar jumped on the news, rising half a US cent to 77.77 US cents.
“It was a strong set of numbers,” Barclays’ chief economist for Australia Kieran Davies told AFP.
“The trend has improved. For a while the labour market was running weaker than what the (forward indicators) job ads and job vacancies were suggesting, so perhaps we are seeing some belated catch-up.”
The Reserve Bank of Australia has been tipped by financial markets and economists to slash the cash rate again this year after cutting it in February for the first time in 18 months, to a record low 2.25 per cent.
The RBA has flagged an easing bias as the economy encounters a rocky transition with an unprecedented mining investment boom coming to an end and the non-resources sector struggling to fill the gap.
The unemployment rate has slowly increased over the past year, peaking at a revised 6.3 per cent in January – a more than 11-year high.
The job gains were led by New South Wales, the country’s largest state.
“The largest state is behind the strength,” Davies said. “The economy in NSW is more diverse and much less exposed to mining and… the housing market (in the state) is exceptionally strong.”
But analysts warned that the economy still faced testing times, with some still expecting the RBA to cut rates by 25 basis points in May.
“The broader picture on the economy still looks pretty challenging because of falling commodity prices and loss of consumer confidence,” Citi’s chief economist for Australia Paul Brennan told AFP.
“I think it would take a lot for the RBA to change its view from an easing bias. We continue to expect that they will act on that easing bias.”
The plunging prices of commodities such as iron ore, Australia’s biggest export, has hit the economy and slashed government revenue.
The iron ore price slumped to a decade-low of US$47.08 in early April, driven by a supply glut and soft demand from China, Australia’s biggest trading partner. — AFP