Australia's unemployment rate remains steady at 5.8 percent
June 13, 2014, 12:04 am TWN
SYDNEY--Australia's unemployment rate remained steady at 5.8 percent for the third straight month in May, data showed Thursday, with the total number of jobs falling in a mixed outlook for the economy.
The figures from the Australian Bureau of Statistics contrasted with analysts' expectations of a rise in the jobless rate to 5.9 percent with 10,000 new positions created.
“The labour force report for May was softer-than-expected at face value but the details were better,” ANZ senior economist Justin Fabo said.
“While employment declined unexpectedly in May, there might be seasonal adjustment issues given that employment has fallen in May in six of the past seven years.”
A total of 4,800 positions were lost last month. Full-time jobs jumped by 22,200, but part-time positions fell by 27,000 to take the number of people employed in the country to 11.564 million.
The participation rate — which measures the proportion of adults in work or looking for it — slipped from 64.7 percent to 64.6 percent.
The Australian dollar eased slightly to 93.75 U.S. cents after the data was released, before retracing its losses.
Fabo said the underlying trend for jobs growth was expected to slow as hiring intentions in the second-quarter moderate.
Economists have also been concerned that a recent weakness in consumer confidence following a tough federal budget, that cut back on government welfare and spending, could weigh on firms' employment plans.
No Change in Interest Rate Outlook
The latest figures are not expected to shift the Reserve Bank of Australia (RBA) away from its outlook of a “period of stability” for interest rates over the next few months, UBS senior economist George Tharenou said.
The central bank has kept the cash rate at a record low 2.5 percent for 10 consecutive months to stimulate non-mining sectors of the economy as resources investment declines following an unprecedented boom in the industry.
Some parts of the economy, such as housing and consumption, have benefited from the low interest-rate environment, which in turn is expected to drive demand.
But Tharenou said a weaker exchange rate was also needed to support a recovery in non-resources industries and for employers to “feel comfortable about their willingness to make long-term investment decisions and long-term hiring decisions.”
“What that means is you are left with this moderate recovery — it's not a boom, not a bust — and you have this steadiness in the labour market persisting,” he said.
“We've got the RBA on hold for all of this year.”