Unemployment rate in Australia falls back to 3.5% despite interest rate rises
Australia’s economy added almost 65,000 jobs in February, more than economists expected, indicating hiring was holding up amid the record run of interest rate rises.
The jobless rate fell to 3.5%, seasonally adjusted, compared with January’s reported 3.7%, the Australian Bureau of Statistics said. Economists had predicted employers added a net 50,000 jobs for last month, leaving an unemployment rate at 3.6%.
Labour market numbers can fluctuate and the ABS said last month that January’s rise in the jobless rate masked a larger-than-usual rise in the number of unemployed people who had a job to go to in the future.
The jobs numbers will be examined closely by the Reserve Bank to determine whether it needs to lift its key interest rate again at its next gathering on 4 April. Such a move would mark 11 rate hikes in a row.
Prior to today’s release, though investors were viewing the likelihood of the RBA pausing in its rate hikes as 100%. They were eyeing signs of a slowing domestic economy but also the growing overseas worries about the strength of the financial sector in the wake of several US bank failures.
The Australian dollar nudged higher to about 66.4 US cents. Shares pared their losses for the day, with the ASX200 benchmark stock index recently 1.5% lower.
The economy added 64,600 jobs for the month, with almost 75,000 of them full-time. Just over 10,000 part-time positions were lost. The participation rate rose 0.1 percentage point to 66.6% in February, also back to the level in December 2022.
Bjorn Jarvis, ABS’s head of labour statistics, said: “The February increase in employment follows consecutive falls in December and January. In January, this reflected a larger than usual number of people waiting to start a new job,
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