SYDNEY: Australia's unemployment rate eased to 6.3% in February as fewer people looked for jobs, data showed Thursday, but economists warned the labour market remained soft, maintaining expectations of another interest rate cut.
The unemployment rate fell from 6.4% in January, a more-than 12-year high, according to the Australian Bureau of Statistics – in line with analysts' forecasts.
Some 15,600 jobs were added to the economy, with full-time positions increasing by 10,300 and part-time roles up 5,300. The proportion of adults in work or looking for work, measured by the participation rate, fell from 64.7% to 64.6%.
The Australian dollar was broadly unchanged, trading about 76.05 US cents after the data was released.
Despite the improved figures, the jobless rate remains among the highest since late 2002, reflecting an economy enduring a rocky exit from an unprecedented mining investment boom that helped the nation avoid recession for two decades.
Employment Minister Eric Abetz said the elevated jobless rate meant the government would continue to push for economic reform.
"We have put in place a whole lot of policies that are slowly working their way through the economy," he said.
ANZ Bank's co-head of Australian economics Riki Polygenis said Thursday's figures did not change her view that the unemployment rate was in an upward trend.
"Below-trend growth outcomes – both past and expected – are consistent with a further gradual rise in the unemployment rate from here, with new hiring insufficient to keep pace with retrenchments in industries such as mining and manufacturing," she said.
Total aggregate hours worked rose 13.0 million hours to 1,620.8 million, which analysts said was encouraging.
More rate cuts expected
The Reserve Bank of Australia cut interest rates to a new record low of 2.25% in February in a bid to support growth in non-mining sectors.
It kept them on hold at its March meeting but adopted an easing bias analysts said pointed to another cut, possibly as soon as April.
The resource-driven economy is also struggling under the impact of a fall in prices for key commodity exports, including an almost halving of iron ore prices in 2014 due to weakening demand from China.
Adding to the rate cut expectations is Australia's slowing economic growth. Official figures released in early March showed the economy expanded 0.5% in October-December, for a year-on-year growth rate of a below-trend 2.5%.
The Reserve Bank has said while the Australian dollar had "declined noticeably" against its strengthening US counterpart, the currency "remained above most estimates of its fundamental value" and needed to fall further to support growth.
St George Bank senior economist Janu Chan said the weak rate of jobs growth would not be ringing alarm bells at the RBA.
But she added "the lack of improvement in the labour market, the soft pace of domestic demand and few signals for a further pick-up in non-mining investment suggest another cut is likely in coming months". – AFP
The unemployment rate fell from 6.4% in January, a more-than 12-year high, according to the Australian Bureau of Statistics – in line with analysts' forecasts.
Some 15,600 jobs were added to the economy, with full-time positions increasing by 10,300 and part-time roles up 5,300. The proportion of adults in work or looking for work, measured by the participation rate, fell from 64.7% to 64.6%.
The Australian dollar was broadly unchanged, trading about 76.05 US cents after the data was released.
Despite the improved figures, the jobless rate remains among the highest since late 2002, reflecting an economy enduring a rocky exit from an unprecedented mining investment boom that helped the nation avoid recession for two decades.
Employment Minister Eric Abetz said the elevated jobless rate meant the government would continue to push for economic reform.
"We have put in place a whole lot of policies that are slowly working their way through the economy," he said.
ANZ Bank's co-head of Australian economics Riki Polygenis said Thursday's figures did not change her view that the unemployment rate was in an upward trend.
"Below-trend growth outcomes – both past and expected – are consistent with a further gradual rise in the unemployment rate from here, with new hiring insufficient to keep pace with retrenchments in industries such as mining and manufacturing," she said.
Total aggregate hours worked rose 13.0 million hours to 1,620.8 million, which analysts said was encouraging.
More rate cuts expected
The Reserve Bank of Australia cut interest rates to a new record low of 2.25% in February in a bid to support growth in non-mining sectors.
It kept them on hold at its March meeting but adopted an easing bias analysts said pointed to another cut, possibly as soon as April.
The resource-driven economy is also struggling under the impact of a fall in prices for key commodity exports, including an almost halving of iron ore prices in 2014 due to weakening demand from China.
Adding to the rate cut expectations is Australia's slowing economic growth. Official figures released in early March showed the economy expanded 0.5% in October-December, for a year-on-year growth rate of a below-trend 2.5%.
The Reserve Bank has said while the Australian dollar had "declined noticeably" against its strengthening US counterpart, the currency "remained above most estimates of its fundamental value" and needed to fall further to support growth.
St George Bank senior economist Janu Chan said the weak rate of jobs growth would not be ringing alarm bells at the RBA.
But she added "the lack of improvement in the labour market, the soft pace of domestic demand and few signals for a further pick-up in non-mining investment suggest another cut is likely in coming months". – AFP
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