Australia keeps adding jobs but still can’t satisfy job seekers

SYDNEY: Australian employment showed another solid increase in February yet the jobless rate still edged higher as more people went looking for work – a paradox that is weighing on the outlook for wages growth and inflation.

Figures from the Australian Bureau of Statistics showed a net 17,500 new jobs were added in February, just under forecasts of 20,000. It was the 17th straight month of job gains, the longest such run since the series began in 1978.

Yet the unemployment rate nudged up to 5.6%, from 5.5% in January, and has hovered between 5.4% and 5.6% for 10 months now.

The participation rate climbed to 65.7%, matching the highest since early 2011, as more women entered the labour force.

With labour supply expanding to meet demand, there was less upward pressure on wages and inflation and thus no near-term trigger for a rise in interest rates from the Reserve Bank of Australia (RBA).

Just this month the head of the central bank declared there was no strong case for a rate rise given wage growth continued to lag far behind job creation.

The underemployment rate – which measures those who have work but want more hours – was still elevated at 8.4%.

That tally, along with the jobless rate of 5.6%, meant there was considerable slack in the labour market, said Westpac economist Simon Murray.

“While that persists, we are unlikely to see a significant acceleration in wages,” he noted.

Interest rate futures showed little change in the odds of a rate rise, with a move by December seen as only a 50-50 shot. — Reuters