"That just gives greater scope for job hiring, and it could mean there's a little bit more flexibility in the labour market than in much earlier years"
- Janu Chan, senior economist at St George bank
Australia's unemployment rate unexpectedly declined to the lowest level in 12 months in May, suggesting that the Reserve Bank of Australia's recent stimulus measures to ignite growth may be paying off. The nation's jobless rate slid to 6.0% in the reported month, down from a revised 6.2% in April. The total number of people with jobs surged by 42,000 to 11.76 million in May, according to the Australian Bureau of Statistics, substantially better than economists' expectations of a gain of 10,000. The unemployment rate is now well below January's 12-year high figure of 6.4%, but has remained above 6% for 12 months in a row since June last year. The participation rate, which measures the proportion of the population that have a job, are looking for work or are ready to start working, remained unchanged during the month, after it was downwardly revised for April to 64.7%.
Last week official figures showed Australia's GDP growth accelerated to 0.9% in the March quarter, beating most expectations, and translating into an annualized 2.3%. Yet, RBA Governor Glenn Stevens said it was unlikely that this pace of growth will be sustained in the current quarter, and said that growth would be at the bottom, or more likely below, the central bank's 2.5%-4% annual GDP forecast range forecasted two years ago.
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