Official figures revealed that the number of people with jobs in Australia rose, driving surge in economy. Last month, the number of employed Australians went higher by 60,900 last, which had been the strongest gain since October 2015.
It was an unexpected rise in employment as 20,000 extra jobs was previously forecasted. There is a significant rise in full-time work with 74,500 positions created in the biggest rise from any time of the year since June 2011 per the data from Australian Bureau of Statistics. That offset a fall of 13,600 part-time jobs.
The rate of unemployment is at 5.9 percent, which came as no surprise because the participation rate rose to an eight-month high of 64.8 percent. The rate measures the percentage of Australians who is either working or does not have a job and are still looking for work.
Australian dollar rallied upon the release of workforce figures shortly before noon on Thursday, rising up to US76c. Per the Business Insider, Australian dollar was close to 0.7 percent against the US dollar after the release of the data from the Australian Bureau of Statistics.
CommSec chief economist Craig James said the most recent figures would be a good news for the Reserve Bank. “Given the dour commentary accompanying the April interest rate decision, policymakers could do with some cheering up,” the Herald Sun quoted him saying. However, James has clarified that the numbers would not modify widespread expectations for the cash rate to remain on hold in the next months.
Tom Kennedy, an economist at JPMorgan, said the reserve bank would stay on alert but can now be less alarmed. Bank of Melbourne senior economist Janu Chan said the central bank would feel relieved that the loss of momentum in the labour market in the past months seemed to have been fleeting. Chan noted that the case for further easing from the RBA lessened but with no significant decline in the rate of unemployment.
The employment rate inched higher in Victoria from 6 percent to 6.1 percent. Data shows Queensland has the biggest increase in the number of people who have jobs because 28,800 extra jobs have been a great help in cutting the unemployment rate to 6.3 percent.
Meanwhile, Nicki Hutley, director and chief economist at Urbis, believes that the rise in employment numbers may not help boost the Australian economy. “We've seen jobs growth of just over 1 percent per annum so that's not enough to make inroads into the unemployment rate nor is it enough to put pressure on wages for that to tick up a bit to help the economy and to help inflation back up," she told CNBC's "Squawk Box.”
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