Unemployment rate rises

Weak jobs data adds pressure on Reserve Bank

THE unemployment rate rose 0.1 percentage points in April to a worse-than-expected 5.2 per cent, adding pressure on the Reserve Bank to deliver a rate cut.

An increase in the monthly participation rate more than offset the 28,400 rise in total employment for the month, with yesterday’s seasonally adjusted data from the Australian Bureau of Statistics also showing a 21,200 increase in the number of people without work.

Full-time employment for April decreased by 6300 to 8.8 million people, while parttime employment increased 34,700 to 4.03 million.

This pushed the underemployment rate 0.3 points higher to 8.5 per cent.

The RBA this month said it would monitor the strength of the labour market as it mulled policy settings, but BIS Oxford Economics analyst Sarah Hunter said the RBA would be reluctant to cut the cash rate as early as next month from its historic low of 1.5 per cent.

“It will raise pressure on the board to loosen policy to support the economy in the second half of the year, particularly given a number of downside risks appear to be crystallising in the international economy,” Ms Hunter said.

Analysts expected the jobless rate for April to remain in a range between 5.0 and 5.1 per cent, before yesterday’s upwards revision of the March unemployment rate to 5.1 per cent.

NAB analyst Kaixin Owyong said the deterioration in the jobs market would probably be of great concern to the Reserve Bank.

“We now place a 50/50 chance of a cut in June,” Ms Owyong said.

Yesterday’s figures showed the net movement of employed people was underpinned by about 300,000 people entering and leaving employment in the month.

The jobless rate lifted in all states but Queensland, which added 5400 jobs.

NSW added the most jobs in April with 25,100, but its unemployment rate lifted 0.2 points to 4.5 per cent. The unemployment rate for women in NSW lifted from 4.3 per cent to 4.8 per cent during the month.

Victoria lost the most jobs, with a 7600 decline driving unemployment 0.3 points higher to 4.9 per cent.

The unemployment rate for Victorian men rose from 4.4 per cent to 4.9 per cent in April.

Unemployment among the nation’s youth – people aged between 15 and 24 – ticked 0.1 points higher to 11.8 per cent.

The Australian dollar dipped after the data’s release.