Australia’s employment growth surpassed all expectations, with figures out today showing the number of employed Australians has hit a 33-year high.
With more people in the workforce, economists say the market remains tight, keeping pressure on interest rates, though it is unlikely to prompt the RBA hike further.
Employment figures for February released by Australian Bureau of Statistics today show an increase of 36,700 in total employment.
Full-time employment rose by 47,700 to 7.634 million and part-time employment was down 11,000 to 3.032 million. It was the first time in four months that part-time employment fell.
In comparison, the unemployment rate fell to a seasonally adjusted 4%, the lowest it has been since 1974 and above market expectation of 4.2%.
JP Morgan economist Helen Kevans told Reuters the case for another RBA rate hike remained strong, with building wages pressure adding to the already negative inflation outlook.
“Owing primarily to the deteriorating inflation outlook, JPMorgan forecasts that the RBA will hike interest rates by 25 basis points in May,” she said.
The ABS figures follow yesterday’s Westpac/Melbourne Institute consumer sentiment result which reported a fall for a third month in a row, which could indicate less of the income allocated to discretionary spending due to higher mortgage rate repayments.
