New statistics show 11,500 jobs vanish in a month
THE nation’s economy has shed 11,500 jobs but Australians hoping the Reserve Bank might ease off on raising interest rates are likely to be disappointed.
The nation’s official unemployment rate jumped unexpectedly to 3.7 per cent in January, according to data released on Thursday by the Australian Bureau of Statistics.
Economists were widely tipping the unemployment rate to hold steady at the 3.5 per cent recorded in December and some 20,000 jobs to be added to the market.
But there were more people out of work in January than usual.
The RBA will be keeping a close eye on the jobs data to see if there are signs the labour market is cooling and taking some of the pressure off wages growth, which can influence inflation.
BIS Oxford Economics head of macroeconomic forecasting Sean Langcake said the January data didn’t provide “any conclusive evidence of this”.
“But it is clear the market is tracking sideways, albeit in a very tight position,” he said.
The release of the jobs data comes a day after Reserve Bank governor Philip Lowe signalled more interest rate hikes are on the way in hawkish comments at senate estimates hearing.
Dr Lowe doubled down on the need to raise the cash rate — which is at 3.35 per cent, its highest in more than a decade — to drive down inflation, saying he was “unsure” how high interest rates would need to go.
ABS head of labour statistics Bjorn Jarvis said the unemployment rate rose by 0.2 per cent in January as the number of people in jobs fell by more than 11,000 and the number of unemployed people increased by about 22,000.
However, Mr Jarvis noted January was the most seasonal time of the year in the Australian labour market, with people leaving jobs but also getting ready to start new jobs or return from leave.
February’s jobs data is expected to be slightly stronger.