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Australia's labor market resilient, keeps jobless rate low at 5.7 percent

Published 05/18/2016, 10:52 PM
Updated 05/18/2016, 11:00 PM
© Reuters.  Australia's labor market resilient, keeps jobless rate low at 5.7 percent
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SYDNEY (Reuters) - Australia's unemployment rate stayed at its lowest in over two years in April as the economy generated nearly 11,000 new jobs, an encouraging outcome highlighting the resilience of the labor market.

Thursday's report from the Australian Bureau of Statistics showed the jobless rate was unchanged at 5.7 percent in April, when the median forecast had been for a rise to 5.8 percent.

The unemployment rate has been around 5.75 percent in recent months, having been as high as 6.25 percent last year.

A total of 10,800 net new jobs were created in April, slightly undershooting forecasts of 12,500. Full time employment fell 9,300, while part-time jobs rose 20,200.

Annual jobs growth was a healthy 2.1 percent.

The Australian dollar <AUD=D4> dropped to a two-and-a-half month low after the mixed jobs data. The Aussie fell as low as $0.7209, from $0.7232 earlier in the day, before bouncing back to where it started the session near $0.7230. A sustained break under $0.7212 would target a major retracement level of $0.7063. While employment growth has slowed from the strong pace of around 2.5 percent in the past two quarters, some leading indicators of employment have been encouraging.

A closely watched survey by the National Australia Bank earlier this month showed businesses' hiring intentions stayed above their long-run averages in April, suggesting ongoing resilience in the labor market.

Underpinning labor demand has been slow wage growth, which reduces cost pressures for businesses.

Government figures on Wednesday showed wages grew at their slowest pace on record last quarter with a mere 0.4 percent increase. That took the annual rate down to 2.1 percent, a record low as well.

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