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Australia’s Unemployment Rate Falls As 40,000 New Jobs Added
https://www.whatjobs.com/news/australia-business-news/australias-unemployment-rate-falls-as-40000-new-jobs-added
The unemployment rate dropped slightly in Australia last month, falling by 0.1 percent, as the economy added nearly 40,000 new jobs.
It creates a complex scenario for the Reserve Bank of Australia (RBA).
According to new data from the Australian Bureau of Statistics (ABS), the jobless rate for May stands at 4 percent, down from April's 4.1 percent.
Bjorn Jarvis, head of labour statistics at the ABS, said: "With employment rising by around 40,000 people and the number of unemployed falling by 9,000, the unemployment rate fell to 4.0 percent."
He noted many people who were previously unemployed in April began or returned to work in May,.
This contributed to the drop in unemployment and the rise in employment figures.
This decrease aligns with market expectations and is unlikely to impact interest rate forecasts significantly.
However, the labor market's performance presents a dilemma for the RBA.
Despite the slight rise in unemployment, the labor market remains tight by historical standards.
Anneke Thompson, chief economist at CreditorWatch, said: "Pressure on wage increases seems to have lessened, especially following the Fair Work Commission's Minimum Wage Review, which set a 3.75 percent increase—below the current rate of inflation and broadly welcomed by economists.”
“Unemployment is still around 24,000 people higher than in March, averaging an increase of 12,000 people each month”
She added a healthy labour market and upcoming tax cuts will likely make the RBA cautious about cutting the cash rate prematurely.
The RBA is expected to wait until the full effects of tax cuts are evident in retail trade, labour force, and savings data, which may not occur until late 2024 or early 2025.
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Jarvis highlighted the tightness of the job market, with far more people employed now than before the pandemic.
He said: "While the total number of unemployed people fell by 9,000 in May, this followed a 33,000 increase in April.
“Unemployment is still around 24,000 people higher than in March, averaging an increase of 12,000 people each month.”
Despite this, there are nearly 110,000 fewer unemployed people than in March 2020.
Jarvis said: "The employment-to-population ratio and participation rate are significantly higher than pre-pandemic levels.
“Along with high job vacancies, this suggests the labor market remains relatively tight, though less so than in late 2022 and early 2023.”
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