Jobless at eight-year low

Unemployment at 4.9% but full-time work falls

AUSTRALIA’S unemployment rate fell 0.1 percentage points in February to an eightyear low of 4.9 per cent, but the number of people in full-time work also dropped for the third time in four months.

Part-time employment drove an overall increase in the number of people with jobs during the month, but seasonally adjusted data released yesterday by the Australian Bureau of Statistics showed a 7300 drop in the number of people employed full-time.

Consensus was for the unemployment rate to stay flat at 5 per cent, and the Australian dollar ticked up following the data’s release, but Capital Economics’ Marcel Thieliant noted that the 4600 rise in employment was the weakest in a year.

The rise was well below the average 48,000 increase over the past six months, Mr Thieliant said.

“The fall in the unemployment rate to an eight-year low in February suggests that the RBA will retain its optimistic stance for now, but we still think that the labour market will soon start to slacken again,” said Mr Thieliant.

“The upshot is that the unemployment rate should soon start to rise again, forcing the Reserve Bank of Australia to cut interest rates.”

The RBA (pictured) this month kept the cash rate on hold at a record low 1.5 per cent and this week elaborated upon its neutral stance, but increasing numbers of economists are predicting one or even two 0.25 percentage point cuts before the end of 2019.

The ABS said yesterday it had to use previous data for the Townsville area because of the February floods and might reassess once March figures had been collated.

People in employment in Townsville accounted for about 1 per cent of all those employed in Australia in 2018, and about 4 per cent of those in Queensland.

“The imputation may have resulted in a slight overestimation of hours worked in Queensland in February 2019, given hours worked in Townsville may have been lower during the floods,” the ABS said.

There were mixed results across the country, with New South Wales and Victoria recording more unemployment after recent historic lows.

NSW had the lowest unemployment rate despite a 0.3 percentage point rise to 4.3 per cent. Victoria went up 0.2 percentage points to 4.8 per cent.

Western Australia, Queensland and South Australia had falls in the jobless rate, but all remain above the national average.