The Reserve Bank could be less likely to lower interest rates before the Federal Budget after the Australian economy added an impressive 44,000 jobs in March.
The ABS figures released today show the growth was driven by both full-time and part-time employment, leaving the unemployment rate steady at 5.2 per cent and outperforming economist’s expectations of a rise to 5.3 per cent.
March saw an increase of 15,800 full-time employed and 28,200 person rise of part-time employment. These figures defined the rise in the number of people employed to around 11.5 million.
It was welcome news for Prime Minister Julia Gillard, who said at a press conference: “We have an economy, the fundamentals of which is strong, and that’s been reaffirmed today by our unemployment figures.”
The participation rate rose in March, indicating an increase in the number of people searching for jobs. This signals increased confidence within the economy, and is the reason why the strong figures did not shape a fall in the unemployment rate.
In terms of states, Victoria lagged behind whilst New South Wales showed the strongest labour market results.
Victoria’s unemployment rate jumped 0.3 per cent to 5.8 per cent in March. Victoria has lost around 20,000 jobs since October, according to the ABS. Western Australia’s jobless rate also rose to 4.1 per cent in March from 3.9 per cent.
In contrast, NSW managed to shave 0.3 per cent off its jobless rate in March to post a rate of 4.8 per cent. Queensland posted similar gains with unemployment falling to 5.5 per cent from 5.7 per cent.
In South Australia, the rate was yet again unchanged at 5.2 per cent, along with Tasmania which has the highest unemployment rate in the country with a rate of 7 per cent.
While the positive news eases pressure on the Reserve Bank to cut interest rates in May, just before the Federal Budget, the central bank will be watching the upcoming inflation figures to determine the next interest rate decision.