The overall trend of a falling unemployment rate remains intact as the Australian economy keeps on producing new jobs. However, economists expect the rate of job creation to slow while the unemployment rate has been stuck at or very close to 5% for over six months now. Recent leading indicators have led the RBA to acknowledge a “tension” between a robust labour market, sub-trend GDP growth and business surveys.
March’s Labour force figures have now been released and they indicate the number of people employed in Australia has grown again. The report indicates the total number of people employed in Australia increased by a net 25,700 even though the unemployment rate ticked up from 4.9% to 5.0%.
ANZ senior economist Felicity Emmett summed up the report. “While the ongoing strength is good news, leading indicators are pointing to slower growth in employment in coming months. Importantly, though, they are not suggesting a meaningful rise in the unemployment rate.”
Market expectations prior to the report’s release were for 15,000 new positions to be created and for the unemployment rate to move to 5.0%. Financial markets reacted in a subdued fashion to the report and local bond yields remained broadly unchanged while the Aussie dollar moved a little higher.