Australia's jobless rate steady

Relevant offers

World

Greece fails to pull out of recession Spoof Qantas Twitter account shut down US financial crisis chair quits mortgage firm Apple shares break above US$500 Moody's warns France, UK, others over ratings Murdoch battle looms over Sun showdown NZ called a haven for illegal Indian cash Riots as Greece approves austerity Greece strikes bailout deal Gunns keen for NZ investment to fire up mill

Australia added 11,400 full-time positions in February but not enough to stop the jobless rate edging higher after a revision for January.

February’s unemployment rate came in at 5.3 per cent, in line with analysts' forecasts. However, revisions in the Australian Bureau of Statistics, which trimmed January's rate to 5.2 per cent, meant the jobless tally rose last month.

The gain in full-time positions last month barely eclipsed the 11,000 part-time positions lost, leaving a net increase of just 400 jobs - the weakest month since August.

Even with the modest increase, the economy has added almost 200,000 jobs since August, bringing the jobless rate well below the 8.5 per cent peak anticipated in the federal government's 2009-10 budget last May.

Macquarie senior economist Brian Redican said that although the jobless figures are notoriously volatile, ''the underlying message is that the labour market remains very solid.''

"There was an improvement in full-time jobs and it confirms that all the improvement we've seen over the past six months has been maintained,'' Mr Redican said.

"If the RBA is going to be concerned about whether the unemployment rate is rising or falling, it should be more concerned that it's falling.''

"That suggests wage pressure might come back at the end of 2010.''

Rate impact

Strong readings in the overall jobs market, a key measure of the economy’s health, provided the impetus for the Reserve Bank to begin raising rates in October.

Last week, the RBA lifted the official cash rate by 25 basis points to 4 per cent, its fourth hike in five meetings, encouraged also by strong consumer and business confidence.

Investors viewed today's mixed jobs figures as easing some pressure on the RBA to increase interest rates again soon.

The probability of an April rate increase fell moderately to a one-in-four chance from a one-in-three prospect prior to today's jobs data release.

The dollar also lost ground, falling to 91.28 US cents from just under 91.5 US cents prior to the data release.

Of the jobs created since August, about one in three of them are in the part-time category.

That suggests underemployment - people who are in the workforce but who would work more hours or in different jobs if they had the option - remains a problem for many Australians.

At the same time, the total hours worked across the economy is little changed from a year ago, limiting the earnings of many part-time workers at a time when interest rates along with household bills are rising.

Still, total monthly hours worked increased 2.4 per cent, or 35.9 million hours, to 1,553.2 million hours in February, the ABS reported today.

The participation rate eased to 65.2 per cent, the ABS said.

- © Fairfax NZ News