As Australia’s unemployment rate in April jumped to 4.1% from a 3.9% in March, it diminished another chance for a hike in interest rate by the Reserve Bank of Australia (RBA).
While the official number of unemployed people increased by 30,300 last month, the number of employed people increased by 38,500.
“A 30,000 people increase in unemployment reflected more people without jobs available and looking for work, and also more people than usual indicating that they had a job that they were waiting to start in,” Reuters quoted Bjorn Jarvis, Australian Bureau of Statistics’ (ABS) head of labor statistics as saying.
ABS data revealed that net employment rose to 38,500 in April from March, exceeding the forecast by 23,700. However, the gains were seen in part-time jobs, which rose to 44,600, while full-time employment dipped to 6,100.
The unemployment figures were revealed as ABS showed the Wage Price Index increased at an annual rate of 4.1% in March quarter, which was a reduction from 4.2% in the December quarter.
This decline was attributed by economists to the peaking of wage growth in the country. Several economists believe the decline would aid the RBA in controlling Australia’s inflation.
Marcel Thieliant from Capital Economics said April’s increase in the unemployment rate eased the chances of RBA further hiking the interest rate.
Earlier this month, the RBA predicted jobless rate would be 4% by June, 4.2% by year’s end and 4.3% in June 2025.
As data revealed increase in both employment and unemployment, the participation rate rose by 0.1 percentage points to 66.7%, which is relatively high, ABC News reported.
Economists also pointed out that average working hours were returning to pre-COVID times, which could suggest that job markets are becoming more regular.
Westpac economists Ryan Wells and Pat Bustamante said, “Average number of hours worked have returned to pre-pandemic levels. These dynamics suggest that the labor market went through a significant adjustment in the second half of 2023 and has now started to normalize.”
