Jobs up and down but slowly getting better
- 09 May, 2013 18:18
Monthly jobs growth continues to bounce up and down like a super ball - but the ball is bouncing higher.
Total employment rose by 50,100 in April, pushing the unemployment rate down 0.1 per cent to 5.5 per cent, the Australian Bureau of Statistics showed on Thursday show.
In March, more than 30,000 jobs were lost and February had a rise of 70,000.
HSBC Australia chief economist Paul Bloxham said the figures suggest the jobs market is improving and the Reserve Bank of Australia may not need to cut the cash rate again.
"Obviously the numbers have been very volatile in recent months but if you look through that at the trend, employment does look as though its been improving since the beginning of the year," he said.
"So we're still of the view that the slump in growth may be behind us and the RBA may not need to cut again."
The RBA cut the cash rate a quarter of a percentage point to record low of 2.75 per cent on Tuesday.
Mr Bloxham said those rate reductions were helping the interest rate sensitive parts of the economy, such as the housing and retail sector.
CommSec chief economist Craig James said that as more good economic data was released, the RBA would probably keep the cash rate unchanged over the next few months after cutting it on Tuesday.
"Reserve Bank board members probably winced when they heard the job numbers," he said.
"The latest employment results were strong, home loan data was probably similarly robust in March and the next economic growth figures should be solid.
"In addition, data out next Monday may show an eight per cent lift in new home loans being written during March. And our early forecast for March quarter economic growth is for a gain of 1.4 per cent."
Mr James said the job market was in good shape, with the unemployment rate staying well below six per cent for a decade.
"The last time that the jobless rate remained below six per cent for an extended period was in the 1970s," he said.
St George chief economist Hans Kunnen said the jobs data has been like a rollercoaster in recent months.
"Was today's leap of 50,100 in the number of people employed an aberration or part of an upward trend?
"Given recent volatility in the job growth numbers we will be treating it as a mild aberration in a slowly improving trend." he said.
"Today's labour force numbers suggest the economy is still expanding and that previous rate cuts are slowly having an impact."
Mr Kunnen said the big rise in employment won't impact the RBA's future decisions on whether to cut the cash rate or not.
He said the central bank board will instead be closely watching the March quarter business investment figures that are out on May 30.