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Australia jobless rate ticked higher in April, job additions beat estimates

Australia jobless rate ticked higher in April, job additions beat estimates

This is roughly in line with the 20,000 jobs rise that had been expected by economists, although they had thought the unemployment rate would have remained at 5.5 per cent.

There were 32,700 more full-time jobs in April, while part-time employment fell 10,000, and the participation rate was up slightly at 65.6 per cent, from 65.5 in March.

Participation rate increased by less than 0.1 pts to 65.7%. Last year, full-time employment accounted for nearly 80% of total employment growth but that has fallen to 40% in the first four months of 2018.

Australia's jobless rate rose to a nine-month high of 5.6 percent in April as more people looked for work, but the number of employed beat expectations as more full-time jobs were added. It has fallen just 0.2 percentage points over the past year and has even ticked a little higher since November.

We may not see a material improvement in wage growth until the unemployment rate dips below 5% and unfortunately policymakers don't expect that to happen in the next three years.

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In order for unemployment to fall, and for wage growth to eventually pick up, employment will need to outstrip growth in the size of Australian labour market for a considerable period.

"This will keep a lid on wages growth and price inflation, and will keep the RBA on the sidelines until at least the December quarter 2019".

The jobless rate is at its highest level since July past year.

The strength of employment has been one of the brightest parts of the economy but the Reserve Bank of Australia (RBA) is awaiting a steady decline in the jobless rate and a revival in wage growth before considering an end to its easy policy.

More details are in the April 2018 issue of Labour Force, Australia (cat.no. 6202.0).