SYDNEY (Reuters) - A bumper run in Australian jobs extended to March and more people went looking for work, official data on Thursday showed, a sign the country’s labor market remains strong despite a small uptick in the unemployment rate.
The local dollar jumped about a quarter of U.S. cent to $0.7200 as traders wagered the Reserve Bank of Australia (RBA) will not rush to ease rates even though the broader economy has seemingly lost momentum.
The employment report is being closely watched for clues on monetary policy as the country’s central bank is counting on labor market strength for a long-awaited pick up in wage growth and inflation in the face of a property market downturn.
Thursday’s data showed a total 25,700 new jobs were created in March, surging past expectations for a rise of 12,000.
Encouragingly, all of that increase was led by full-time work with part-time decreasing 22,600.
“A solid set of employment figures, dominated by full-time roles, suggests that households and businesses may have to wait a little longer for rate cuts,” said Callam Pickering APAC economist at global job site Indeed.
“From the perspective of policymakers, particularly the Reserve Bank, this will be viewed as a positive report,” Pickering said.
Australia is creating jobs at a brisk annual pace of 2.4 percent, much faster than the 1.6 percent rise in population.
Even so, the unemployment rate rose to 5.0 percent in March from an eight-year trough of 4.9 percent the previous month as the participation rate climbed to 65.7 percent in a sign more people went looking for work.
While the jobless rate has stayed in a 4.9-5.1 percent band since last September, consumer prices have remained lukewarm for years now.
Worryingly for the RBA, first-quarter data due next week is expected to show core inflation further cooled to 1.7 percent from 1.8 percent in the previous quarter, undershooting its 2-3 percent mid-term target.
The RBA has held the cash rate at an all-time low of 1.50 percent for 2-1/2 years now and earlier this year switched away from its long-held tightening bias to a more neutral stance. On Tuesday, minutes of the central bank’s April meeting showed it believes a cut in interest rates would be appropriate if inflation stayed low and unemployment trended high.
Reporting by Swati Pandey; Editing by Shri Navaratnam