Unemployment has fallen to a one-year low of 6 per cent in May as an estimated 42,000 jobs were added to the economy last month.
In a strong set of jobs numbers, the Bureau of Statistics estimated that full-time employment rose by 14,700, while the number of part-time workers increased by 27,300.
The increase in jobs drove a 0.2 percentage point fall in the unemployment rate from a revised rate of 6.1 per cent in April to 6 per cent in May, on figures rounded to one decimal place.
Economists surveyed by Bloomberg were typically expecting 15,000 jobs to be added and unemployment to remain steady at 6.2 per cent.
The data also showed that participation – the proportion of people aged over 15 in work or looking for it – remained steady at a revised 64.7 per cent.
Aggregate monthly hours worked also rose 0.1 per cent last month.
JP Morgan’s chief economist Stephen Walters said that the data highlight a positive trend in employment so far this year.
“Admittedly (the increase in employment) is mainly part-time but there’s also a solid increase in full-time employment,” he told Reuters.
“It means now this year we’ve seen progressively lower jobless rates month-on-month. Hours worked were up as well.”
However, RBC’s Michael Turner told Reuters that, “the data doesn’t gel with other measures like ANZ’s job ads.”
The latest job ads figures show that employment growth has actually slowed recently, although the ABS unemployment figures tend to lag developments in job ads by several months.
Either way, both economists agree that today’s data is unlikely to change the Reserve Bank’s current thinking on interest rates, which is to leave them on hold and see how the economy changes over coming months.
“We weren’t forecasting any more moves from the Reserve Bank and when you get numbers like these it’s even less likely that the bank’s going to have to move again,” Mr Walters added.
news source & image credit: abc.net.au