Jobs growth had a big surge in February but the unemployment rate stayed steady at six per cent because of a significant rise in the number of people entering the work force.
The total number of people with jobs rose 47,300 in the month, compared to a gain of 2,700 in January, the Australian Bureau of Statistics said on Thursday.
CommSec economist Savanth Sebastian said the improving trend in full-time employment could help boost consumer confidence.
“The key now is what takes place in the next couple of months,” he said.
“The one area that has been a dampener over the past six weeks has been consumer confidence which has taken a backward leap, driven by the uncertainty around employment.
“This will help ease those concerns to some degree which could be a positive for consumer confidence.”
He said the figures were in line with the Reserve Bank of Australia’s expectations and won’t change the outlook for interest rates.
Aussie dollar gets a bounce
The Australian dollar rose almost half of a US cent after the release of better-than-expected jobs figures. The Australia dollar was worth 90.64 US cents at 1134 AEDT, up from 90.17 cents just before the data was released.
The participation rate – the proportion of the population that have a job, are looking for work or are ready to start work, rose to 64.8 per cent, from 64.6 in January, the ABS said.
RBC Capital Markets currency strategist Michael Turner said the rise in the participation rate is a welcome development, given how much it had fallen recently.
“There’s still a bit of slack in the labour force but the trend in employment looks to have improved noticeably over the past six months, which fits in well with some of the survey data – the (ANZ) job ads data has improved as well,” he said.
Mr Turner expects the unemployment rate to peak during the second quarter of 2014 at around 6.25 per cent.
“As the number showed today, if there is a tiny little cyclical uptick in participation, that would keep the unemployment rate from dropping too much,” he said.
“It’s still uncertain how things will play out in the mining sector in the second half of the year but generally we think there will be slightly firmer outcomes for employment in the second half of the year.”