- Michael Turner, a debt strategist at Royal Bank of Canada
Australia recorded a surprise improvement of the labour market in May, boosting payrolls and pushing overall jobless rate lower, even as the job market withstood a weaker domestic outlook. The number of Australians employed rose by 1,100 after rising 45,000 in April, the statistics bureau said on Thursday. Analysts, however, expected a 10,000 drop. Meanwhile, the jobless rate declined to 5.5%, compared with a revised 5.6% in the preceding month. The full-time employment fell by 5,300 between April and May, offsetting an increase of 6,400 part-time jobs. Westpac also said the fall in unemployment rate was supported by a decline in participation leading to a decline in the labour force.
Many economists predict Australian unemployment rate will rise towards 6% over the upcoming months, as the world's 12th-largest economy works through a painful transition away from the mining sector boom. It is widely expected that the jobless rate will peak around 6.3% in the first half of the next year, as businesses are showing reluctance to push ahead with expansion plans. The Reserve Bank of Australia led by the Governor Glenn Stevens cut benchmark interest rate by 2 percentage points during the last 20 month, including a recent rate-cut in May, seeking to revive industries outside mining sector.
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