Australia’s job­less rate falls to 6.1%, but econ­omy faces chal­lenges

The China Post - - WORLD BUSINESS - BY GLENDA KWEK

Australia’s un­em­ploy­ment rate dipped to 6.1 per­cent in March, data showed Thurs­day, a bet­ter- than- ex­pected read­ing that could ease pres­sure on the cen­tral bank to fur­ther cut in­ter­est rates.

The fig­ure was down from a re­vised 6.2 per­cent in Fe­bru­ary, as 37,664 po­si­tions were cre­ated, ac­cord­ing to the Aus­tralian Bureau of Statis­tics.

An­a­lysts had fore­cast a read­ing of 6.3 per­cent with 15,000 jobs added.

Full- time roles in­creased by 31,516 while part- time jobs rose 6,148. The par­tic­i­pa­tion rate, which mea­sures the pro­por­tion of adults in work or look­ing for work, strength­ened from a sea­son­ally ad­justed 64.7 per­cent to 64.8.

The Aus­tralian dollar jumped on the news, ris­ing half a U. S. cent to 77.77 U. S. cents.

The Re­serve Bank of Australia has been tipped by fi­nan­cial mar­kets and econ­o­mists to slash the cash rate again this year af­ter cut­ting it in Fe­bru­ary for the first time in 18 months, to a record low 2.25 per­cent.

The RBA has flagged an eas­ing bias as the econ­omy en­coun­ters a rocky tran­si­tion with an un­prece­dented min­ing in­vest­ment boom com­ing to an end and the non- re­sources sec­tor strug­gling to fill the gap.

The un­em­ploy­ment rate has slowly in­creased over the past year, peak­ing at a re­vised 6.3 per­cent in Jan­uary — a more than 11- year high.

Econ­omy Fac­ing Chal­lenges

The job gains were led by New South Wales, the coun­try’s most eco­nom­i­cally strong state.

“The largest state is be­hind the strength,” Davies said. “The econ­omy in NSW is more di­verse and much less ex­posed to min­ing and ... the hous­ing mar­ket ( in the state) is ex­cep­tion­ally strong.”

But an­a­lysts warned that the econ­omy still faced testing times, with some still ex­pect­ing the RBA to cut rates by 25 ba­sis points in May.

The plung­ing prices of com­modi­ties such as iron ore, Australia’s big­gest ex­port, has hit the econ­omy and slashed gov­ern­ment rev­enue.

The iron ore price slumped to a decade- low of US$ 47.08 in early April, driven by a sup­ply glut and soft de­mand from China, Australia’s big­gest trad­ing part­ner.

UBS se­nior econ­o­mist Ge­orge Thare­nou said while the data had im­proved, the trend in the un­em­ploy­ment rate was still hold­ing around the high­est level since 2002.

In­fla­tion fig­ures are due next week ahead of the next cen­tral bank meet­ing on May 5.

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