Australia’s unemployment rate edged 0.3 per cent lower to a six-year low of 5.0 per cent in September, bettering market expectations.
But it wasn’t all good news, with fewer people in part-time work pushing down the participation rate.
The overall number of people with a job increased by 5,600 on seasonally adjusted estimates, figures from the Australian Bureau of Statistics showed, but the participation rate dipped 0.3 per cent from August to 65.4 per cent.
Economists had forecast that both the unemployment and participation rates would remain steady.
The last time the seasonally adjusted unemployment rate was this low was April 2012, and the last time it was lower was June 2011’s 4.9 per cent.
The Australian dollar, which had been as low as 71.05 US cents on Thursday, spiked from 71.12 to 71.28 US cents on the data’s release.
BIS Oxford Economics head of macroeconomics Australia Sarah Hunter said, while she was encouraged by a 20,300 jump in the number people with full-time employment, a 14,700 drop in people employed part-time pointed to a slowdown in the economy.
“Overall, jobs growth has slowed markedly and become much more patchy in the last three months, suggesting that momentum in the economy may be slowing after a strong start to 2018,” she said.
“We expect the pace of GDP growth to fall back to around three per cent year on year by the end of the year, as the residential construction downturn and moderation in consumer spending growth begin to bite.”
CommSec Senior Economist Ryan Felsman said, while the labour market is expected to gradually tighten, strong population growth, rising part-time work and record participation from women and older workers was keeping the unemployment rate ‘sticky’ at around 5.0 to 5.5 per cent, above the Reserve Bank’s estimates of full employment.
“With more Aussies seeking to work longer hours or days a week, particularly if casually employed, spare capacity in the labour market has kept wages growth subdued,” he said.
Seasonally adjusted monthly hours worked in all jobs increased by 6.2 million hours – or 0.4 per cent – in September to 1,757.5 million hours.
The seasonally adjusted employment to population ratio remained steady at 62.2 per cent, and increased by 0.4 percentage points from the same time last year
Since September 2017, seasonally adjusted full-time employment has increased by 217,500 persons, while part-time employment has increased by 63,400 persons.