- National Australia Bank
Australia's economy added jobs in April and the unemployment rate held at the lowest level in more than two years as the number of people in part-time roles increased. According to the Australian Bureau of Statistics, the jobless rate was unchanged at 5.7% in March, beating economists' expectations for a rise to 5.8%. A net 10,800 jobs were added to the economy last month, missing analysts' expectations of a 12,000 net increase and compared with a revised 25,700 in March. However, Australia's labour force participation rate unexpectedly fell last month, from 64.9% in March to 64.8%. Additionally, a report showed wages climbed 0.4% in the March quarter, for an annual increase of 2.1%, the lowest annual rate since the data series began in 1997.
The RBA this week said that data suggested employment would continue to increase, albeit at a somewhat slower pace than over the previous year. Australia's unemployment rate is predicted to remain around 5.8% in 2016, according to the RBA's May Statement on Monetary Policy, before dropping at the end of the forecast period when GDP growth is expected to pick up. For now, stubbornly low inflation is the central bank's bigger concern. In the March quarter Australia's headline inflation rate slowed from 1.7% to 1.3%, but more importantly, core inflation also declined sharply, triggering the RBA's interest rate cut on May 3.
© Dukascopy Bank SA