Australia’s jobless rate fell to a near eight-year low in February as a bumper run in employment extended, sending the local dollar sharply higher on expectations the country’s central bank won’t cut interest rates any time soon.
A total of 4,600 net new jobs were created in February with all of the increase led by part-time work, according to the Australian Bureau of Statistics (ABS) report on Thursday.
Although February’s performance was a pale shadow to the downwardly revised 38,300 employment growth recorded the previous month, the data showed the overall trend in the labour market was still positive, reports Reuters.
Australia is creating jobs at a brisk annual pace of 2.3 per cent, faster than the 1.6 per cent rise in population.
Even so, the participation rate fell to 65.6 per cent from 65.7 per cent as fewer people went looking for work. That sent the jobless rate to the lowest since June 2011 at 4.9 per cent.
The Australian dollar jumped 0.6 per cent to $0.7155, near a one-month high as the data tempered market expectations that the Reserve Bank of Australia (RBA) would cut the benchmark interest rate from its current record low.
The employment report has become increasingly important for monetary policy as the country’s central bank is counting on labour market strength for a long-awaited pick up in wage growth and inflation in the face of a property market downturn.
The RBA has held the cash rate at an all-time low of 1.50 per cent for 2-1/2 years now and just last month switched away from its long-held tightening bias to a more neutral stance.