Unemployment better than expected, dampening hopes of early rates cut

unemployment better than expected, dampening hopes of early rates cut

‘Bollard Man’ speaks about confrontation with Bondi Junction stabber

Australia’s unemployment rate has risen slightly to 3.8 per cent after 6600 jobs were lost in March, a stronger-than-expected result that will likely end any chance of a mid-year interest rate cut.

The jobless rate, revealed today by the Australian Bureau of Statistics, is only a marginal increase on last month’s surprisingly low figure of 3.7 per cent and slightly better than market forecasts of a larger rise to 3.9 per cent.

“With employment falling by around 7000 people and the number of unemployed rising by 21,000 people, the unemployment rate rose to 3.8 per cent,” ABS head of labour statistics Bjorn Jarvis said.

Jarvis said that, while higher than the February number, which came on the back of an unusually large surge in workers starting new jobs, the current unemployment level remains historically low.

“The labour market remained relatively tight in March, with an employment-to-population ratio and participation rate still close to their record highs in November 2023,” he said.

“While they have both fallen by 0.4 percentage points since then, they continue to be much higher than their pre-pandemic levels.”

That tight labour market means the Reserve Bank is unlikely to pull the trigger on an interest rate cut until towards the end of the year.

“It is hard to see the RBA rushing towards cutting interest rates soon,” AMP deputy chief economist Diana Mousina said.

“We have been expecting the RBA to cut around mid-year, but the resilience of the labour market means a high risk that the first cut comes later in the second half of the year, even with our expectation that next week’s March quarter inflation data will show a further improvement in reducing the pace of inflation.”

She said that while the jobs market is “holding up much better than expected”, unemployment is expected to rise in the coming months.

“The resilience of the labour market over the past one-two years has been surprising,” Mousina said.

But, our jobs leading indicator is still pointing to slower employment growth ahead and we expect the official data to ‘catch down’ to our leading indicator and still see the unemployment rate heading north towards 4.5 per cent.”

While unemployment rose 0.1 per cent in March, underemployment actually fell by the same number and the number of hours worked rose by 0.9 per cent.

“The recovery in growth in hours worked over the last two months has seen the annual growth rate rise to 1.7 per cent,” Jarvis said.

“This was still weaker than the annual growth rate in employment of 2.4 per cent, but that partly reflects the very high level of hours worked a year ago.”

News Related

OTHER NEWS

Disrupt Burrup protesters searched and phones seized

Disrupt Burrup Hub group say police have issued move-on notices prohibiting access to the WA site. A group of climate activists and filmmakers say their phones have been seized during ... Read more »

The generation driving a ‘megatrend’ of poor mental health in Australia

As individuals, we have unique experiences that affect our mental health and wellbeing, but what about the collective experiences that influence each generation? The mental health of Australians has been ... Read more »

Geraldton meatworks set to reopen after five years in bid to meet chilled meat demand from Asia, Middle East

Syed Ghazaly wants to see the Geraldton abattoir reopen early next year to process 1,000 sheep a day. (ABC Mid West Wheatbelt: Chris Lewis) The new owners of a mothballed ... Read more »

Blues seek ‘growth’ as pre-season begins; new Hawk aims to be AFL’s serial pest

Carlton coach Michael Voss says he and his players understand there are heightened expectations on them, but insists the Blues are ready to develop individually and in their game plan. ... Read more »

Bulldogs continue signing frenzy with swap deal

The Bulldogs’ off-season signing frenzy is set to continue with the club reportedly set to land Cronnor Tracey in a swap deal. The Sydney Morning Herald reports Tracey is expected ... Read more »

Customers to weigh in as Optus disruption comes under microscope

Consumers and impacted businesses are being urged to have their say on the Optus outage, with the federal government laying out the terms of reference for its review into the ... Read more »

Released detainee unable to be contacted by authorities

It has been revealed a released immigration detainee is unable to be contacted by authorities. Border Force has referred the matter to the Federal Police as authorities are attempting to ... Read more »
Top List in the World