A surprise dip in the nation’s unemployment rate shows Australia is charting a strong course through the global recession, although the fall could a one-off “aberration”, economists say.
Australia’s unemployment rate was a seasonally adjusted 5.4 per cent in April, down 0.3 percentage points from the previous month, the Australian Bureau of Statistics (ABS) said on Thursday.
Economists had predicted the ABS data would show a rise in the jobless rate to 5.9 per cent, from 5.7 per cent.
It is the first fall in the monthly unemployment rate since August last year.
During April, total employment rose by 27,300, with full-time employment up by 49,100 but part-time employment falling by 21,800.
The nation’s jobless rate was at a 33-year low of 3.9 per cent in February 2008, but rose to 5.7 per cent in March this year – its highest level since October 2003.
Economists had expected total employment to decline by 25,000.
Employment grew by 0.1 per cent, compared to 2.8 per cent a year ago, the slowest pace since August 1997 when employment contracted by 0.1 per cent.
Macquarie Group senior economist Brian Redican said the labour force report, coupled with recent positive local economic data, showed the nation was holding up well in the current global economic downturn.
“It’s not just the labour market numbers,” Mr Redican said.
“It’s yesterday’s retail trade numbers, it’s the turnaround in housing and building approvals and even the strength in exports up until March.
“It’s a pretty consistent story that Australia is actually getting through this (crisis) in much better shape than most people have given it credit for.”
ABS figures published on Wednesday showed retail sales rose 2.2 per cent in March.
Mr Redican said while the jobs report was “extraordinarily strong”, he described it as a “one-off aberration” and expected to see a further deterioration in the months ahead.
“We’ve seen no signs of any significant improvement in things like jobs advertisements or job vacancies, and hiring intentions in the business surveys still remain very weak,” Mr Redican said.
“I do think we will see further weakness in the next six months.”
He also cautioned against reading too much into one month’s result, given the volatility of the labour force data series.
“We still have to have a lot of caution about these numbers,” Mr Redican said.
JP Morgan senior economist Helen Kevans said the spike in employment was barely believable.
“The spike in employment is in sharp contrast to anecdotal evidence indicating that labour market conditions continued to deteriorate in early 2009,” she said in a research note.
“If history is anything to go by, though, this fall (in unemployment) could be quickly reversed.”
She said the unemployment rate dropped from 6.2 per cent in February 1990 to 5.9 percent in March 1990, but closed the year at 7.7 per cent.
By the end of 1991 stood in double-digits at 10.1 per cent.
“We suspect a similar outcome from this recession, with our forecast calling for the jobless rate to soar to 9 per cent by the end of 2010.”
The flow of announced job losses continued in April after Qantas Airways Ltd said it would cut 1,750 jobs – about five per cent of its workforce – as it battled slumping demand for travel.
In the same month, mining giant Rio Tinto said it would retrench about 700 workers from its Queensland workforce due to lower demand for aluminium. This came on top of the company’s previously announced 14,000 global cull of its workforce.
The Australian dollar reacted positively to the figures.
The local currency was trading at $US0.7467 just before the figures were released at 1130 AEST, but rose to an intraday high of $US0.7551 shortly afterward.