Employment grew more than expected last month, led by a surge in full-time jobs, figures released by the Australian Bureau of Statistics on Thursday show.
But a rise in the participation rate kept the unemployment rate steady at 5.9 per cent, in line with market expectations.
Aussie employment take on new meaning
The highlight of the week is arguably the March employment report. Given the Reserve Banks recent concerns about the labour market, this data point takes on new meaning. (This video was produced in commercial partnership between Fairfax Media and IG Markets).
The number of employed Australians grew by 60,900 in March, based on seasonally adjusted figures, the ABS said. Economists had expected an increase of only 20,000.
“We have seen strengthening in full-time growth over recent months, following falls in full-time employment recorded through much of 2016,” said Jacqui Jones, acting general manager of the ABS’ Macroeconomic Statistics Division.
The unemployment rate remained steady at 5.9 per cent in March, official figures show. Photo: Virginia Star
The ABS said employment grew 0.14 per cent in March in trend terms – slightly below the 20-year average growth rate of 0.15 per cent. Annual trend job growth is now 1 per cent – about half the long-term average.
The participation rate, which refers to the number of people either employed or actively looking for work, rose slightly to 64.8 per cent.
The biggest jump in jobs was in Victoria. NSW was the only state where employment decreased, falling by 1000 employed people.
The ABS said the total hours worked fell by 400,000 hours, with work hours falling for both full-time and part-time workers.
The Aussie dollar bounced on the data, rising about a quarter of a cent to the day’s high of US75.70¢.
‘Pinch of salt’
The surge in employment “should be taken with a pinch of salt”, said Paul Dales, chief economist for Australia at Capital Economics.
“The fact that it was accompanied by a 64,900 leap in the size of the labour force suggests that the rise in employment has more to do with survey sampling issues than anything else.”
CommSec chief economist Craig James said the latest release was a case of “the trend is your friend”.
“The seasonally adjusted job figures are clearly volatile,” Mr James said.
“But the trend data smooths out the bumps and shows employment rising by 16,500 in March with the jobless rate at 5.8 per cent. That seems to line up better with all the other economic indicators and surveys.”
TD Securities’ head of Asia-Pacific research, Annette Beacher, said “the RBA is concerned about the weak underbelly of the labor market, but today’s trend pick-up in full-time hours worked and employment provide some offset”.
“Continued improvement in full-time employment trends is supportive for our November RBA rate hike call.”
Mr James said there was nothing in the latest data to advance the case for rate hikes or rate cuts.
“There is still too much ‘noise’ in the data. But certainly the latest figures would cheer up the Reserve Bank. Given the dour commentary accompanying the April interest rate decision, policymakers could do with some cheering up,” he said in a note to clients.
with AAP and Bloomberg