MNI DATA IMPACT: Australia Jobless Rate Up Despite Jobs Gain

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's unemployment rate surprised by moving higher to

5.2% in April, up from an upwardly revised 5.1% in March, data released Thursday

showed. The rate high an eight year low of 4.9% in February.

     Here are points of interest in the Australian Bureau of Statistics data.

Pressure on RBA

The Reserve Bank of Australia's recent Statement on Monetary Policy placed a

strong focus on labour market data as a driver for the Bank's outlook, and the

Bank forecast is for an unemployment rate of 5.0% throughout 2019. Today's

result will put more pressure on the RBA to cut official interest rates, with

the market expecting a move in either July or August. This is despite the fact

that the participation rate is higher and more jobs were added in April.

Employment keeps rising 

Although the unemployment rate moved higher in April, the economy added another

28,400 jobs for the month. Over the past year trend employment has increased by

311,000 persons, or 2.5%, which is above the annual growth over the past 20

years. So while the unemployment rate is higher in seasonally adjusted terms,

the size of the Australian labour market continues to increase.

Participation rate keeps rising. 

The April participation rate was up 0.1 points to 65.8% and has increased over

the last two months. Participation has continued to rise and more people have

continued to find employment and this has been a factor in keeping the overall

unemployment rate steady despite the increasing size of the labour market. 

Fall in full-time employment 

Although employment increased by 28,400 persons in April, full time employment

decreased 6300 and part time employment increased by 34,700. The RBA has seen

increases in full time employment as a sign of the strength of the labour

market, and the reversal of the recent trend could be another argument in favour

of an interest rate cut.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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