Australia’s jobless rate held steady last month, with employers adding more than 72,000 full-time positions in the latest sign of resilience in the Australian economy.
The country’s unemployment rate for March was 3.5%, seasonally adjusted, the Australian Bureau of Statistics said on Thursday. Taking into account the drop of part-time roles of just over 19,200, the net jobs gain last month was 53,000.
Economists had forecast the jobless rate would edge higher to 3.6% from 3.5% in February, with employers adding a net 20,000 jobs for the month.
Australia’s jobless rate held steady at 3.5% in March, @ABSStats says. The 72,200 extra full-time positions means almost 9.75m Australians are now holding down full-time jobs. pic.twitter.com/boBIxBdM03
— @[email protected] (@p_hannam) April 13, 2023
“In line with the increase in employment, the employment-to-population ratio increased 0.1 percentage point to 64.4%, with the participation rate remaining at 66.7%,” the ABS head of labour statistics, Lauren Ford, said.
“Both indicators were close to their historic highs in November 2022, reflecting a tight labour market and explaining why employers are finding it hard to fill the high number of job vacancies,” Ford said.
The Australian labour market has been relatively robust amid the record run of 10 consecutive interest rate rises by the Reserve Bank. That series ended earlier this month, with investors predicting the central bank will pause again when its board meets next on 2 May.
At current levels, the unemployment rate remains near its lowest since the mid-1970s. The International Monetary Fund this week forecast the rate would rise to 4% by the end of this year compared with about 3.75% predicted by the RBA in its February update.
The dollar climbed about a quarter of a US cent to 67.17 US cents after the release of the data, indicating investors were lifting their expectations that the RBA may raise its cash rate again. Stocks extended minor losses to be about 0.25% lower for the day at noon.
“There are very few signs of weakness in these data and little to suggest the labour market is slackening in a meaningful way,” said Sean Langcake, head of macroeconomic forecasting at BIS Oxford Economics.
It affirmed their existing view that the first-quarter inflation number will be a large one and that the RBA would raise interest rates again in May, he said.
The ABS’s Ford said both the employment-to-population ratio and the participation rate remain close to historic highs. These reflect “a tight labour market and explaining why employers are finding it hard to fill the high number of job vacancies”.
Ford noted female employment was up by 81,000 over the past two months alone, lifting the female participation rate to a record high of 62.5%. Their employment-to-population ratio was also at a record 60.4%.
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EY’s Chief Economist Cherelle Murphy said there was as yet “no turning point in the demand for workers”, with roughly one job opening for every unemployed person.
Murphy noted that the latest National Australia Bank survey showed that business conditions remain well above their long-run average.
“The Reserve Bank will be pleased that the gains in the labour market are continuing, but concerned that it provides an upside risk to inflation over the remainder of the year, given the upside risks to wages,” she said. “If this were to occur, and if inflation remains stubbornly high, a further rate rise would be warranted.”
Brendan Rynne, KPMG’s chief economist, said the continued tightness in the labour market “strengthens the case of a 25 basis-point increase in the cash rate in the next RBA meeting, unless the quarterly inflation data due out later this month dramatically surprises us on the downside”.
Stephen Wu, a CBA economist, noted the economy had been able to generate jobs fast enough to keep pace with a population expanding quickly after flatlining during the Covid disruptions closed borders.
“The working age population has grown by 2.3% over the past 12 months – its fastest pace since 2008,” Wu said.
“This strength reflects the rapid rebound in net overseas migration driven largely by international students,” he said, adding that the population was now just 0.5% below pre-pandemic trendlines, closing a gap that had widened to 1.5% by the end of 2021.