Australia’s jobless rate unexpectedly declined in February as fewer people searched for work, suggesting the central bank may keep interest rates on hold as it gauges the strength of the labor market.
* Unemployment fell to 5.8% from 6%; economists predicted no change at 6%
* Employment rose 300 from January; economists forecast 13,500 gain
* Full-time jobs jumped by 15,900; part-time employment dropped by 15,600
* Participation rate, a measure of labor force as a share of population, fell to 64.9% from a revised 65.1%; economists predicted 65.2%
Australian policy makers are trying to support growth against a backdrop of stagnant wages, falling business investment and weak commodity prices. They’ve enjoyed some luck with services industries including education and tourism boosting hiring as they capitalize on the weaker currency.
Indeed, the economy recorded a surge in jobs in October and November, though the scale of the increases brought renewed skepticism about the accuracy of the labor force data, which the Australian Bureau of Statistics has acknowledged in the past. At the same time, data this month showed the economy grew a strong 3 percent in the final three months of last year, suggesting there was at least some signal in the jobs reports.
“We suspect that the annual rate of employment growth will gradually fall back over the coming months,” Paul Dales, chief economist for Australia and New Zealand at Capital Economics., said before the release. “That is consistent with labor market indicators.”
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The local dollar traded at 75.70 U.S. cents at 11:37 a.m. in Sydney, from 75.64 cents before the data was released.
Australia is grappling with the fallout from plunging prices of its key commodity exports as Chinese demand eases and newly-opened mines boost supply. The central bank, which has cut rates by 2.75 percentage points since late 2011, is banking on improving consumer confidence to spur spending and encourage business investment.
Macquarie Group said last month that it’s hiring about 400 staff to manage the
recently acquired Esanda dealer finance business.
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