MNI DATA PREVIEW: Australia Jobless Rate Seen Steady At 5%

By Lachlan Colquhoun

     SYDNEY (MNI) - With the Reserve Bank of Australia focusing on the

employment market, the monthly Labour Force Survey takes on added importance

ahead of the June policy decision.

     Here are five things to look for in Thursday's release by the Australian

Bureau of Statistics.

Unemployment expected to remain steady. 

Australia's unemployment rate has stabilised at 5.0% and is expected to remain

steady. The February figure surprised with an eight year low of 4.9% but that

was considered a statistical anomaly. A 5.0% unemployment rate is consistent

with forecasts from the Reserve Bank of Australia.

No strong signal for RBA. 

The RBA's recent Statement on Monetary Policy placed a strong focus on labour

market data as a driver for the Bank's outlook. However, wage price index data

for the March quarter was released this week and showed virtually no change from

the previous quarter, with wages up 2.3% year-on-year, the same result as for

the December quarter. An unchanged unemployment rate tomorrow would not give any

strong signals to the RBA given its previous comments, and would leave the

market continuing to speculate on the timing of the expected interest rate cut.

Participation rate keeps rising. 

The March participation rate was up 0.1 points to 65.7% and was a major

statistical factor in a higher overall rate. 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.

Full time employment strong. 

Full time employment jumped by 48,300 in March, more than offsetting a 22,600

decline in part time workers. The RBA has been heartened by the fact that many

of the new jobs which have been created have been full time, and sees this as a

sign of a strong labour market.

Uneven pattern across the states. 

Despite boasting the largest employment increase of 10,400, the unemployment

rate in Queensland increased by 0.7 points to 6.1% in March, the highest rate of

all states. This is attributed to seasonal factors driving participation rates.

The lowest unemployment rate continues to be in New South Wales with 4.3%,

although the rate increased by 0.1 points in March as the number of employed

people fell by 2600. This reflects Australia's two speed economy with strong

regional differences.

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

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