Australia’s unemployment rate fell to 5.8 per cent in March from 6.1 per cent in February, official figures show.
The total number of people with jobs rose 18,100 to 11.553 million in the month, according to seasonally adjusted figures released by the Australian Bureau of Statistics on Thursday.
The median forecast for the unemployment rate was 6.1 per cent in March, with 5,000 fewer people in jobs, according to an AAP survey of 11 market economists.
The Australian dollar hit another four month high after the release of the better-than-expected jobs figures.
The local currency was worth 94.38 US cents at 11.35am AEST, up from 93.85 US cents just before the data was released, and its highest level since November 2013.
ANZ chief economist Ivan Colhoun said that the result was partially driven by the falling participation rate as well as job creation.
“The Australian economy has improved a bit in the last three to six months,” Mr Colhoun said.
“I think the rebalancing is definitely happening. We can see housing approvals and construction strengthening, we can see consumer spending strengthening a bit, we can see job ads improving … we can even see some better signs from non-mining investment intentions.
“There are encouraging signs.”
Mr Colhoun said that ANZ expected the unemployment rate to peak around the six per cent mark over the next few months.
Full-time employment fell 22,100 to 8.029 million in March and part-time employment was up 40,200 to 3.524 million.
The participation rate – the proportion of the population that have a job, are looking for work or are ready to start work – fell to 64.7 per cent, from 64.9 per cent in February.
RBC Capital Markets senior economist Su-Lin Ong said the figures show the employment market is strengthening despite the fall in the participation rate.
“Employment growth has really picked up pace so far in 2014,” she said.
“There was a small drop in the participation rate but when you look at the details, particularly the continued gains in employment growth, it’s consistent with underlying strength in the labour market.
“I think it’s a pretty encouraging picture, it’s consistent with what the leading indicators have been telling us.
“There’s a good chance that the labour market will look better in 2014, compared with what was a fairly subdued 2013.”
Employed people in Australia worked a total of 1.617 billion hours in March, the seasonally adjusted figures showed.
That was up by 0.5 per cent from the 1.609 billion hours worked in February, and up 1.6 per cent from the 1.592 billion hours worked in March 2013.
The average amount of time worked per employee rose to 139 hours and 59 minutes in March, from 139 hours and 30 minutes in February, a rise of just over 28 minutes, or 0.3 per cent.
Compared with March 2013, the average time worked per employee rose by 40 minutes, or 0.5 per cent.
CommSec chief economist Craig James said that job creation so far in 2014 was at its strongest in two years.
“There is no question that the economy has lifted and it is pretty clear that the transition in activity from mining to housing construction has been a case of so far so good,” he said.
“The job market is showing signs of stabilising with unemployment having peaked or pretty close to it.”
Mr James said the jobs figures confirm that another interest rate cut by the Reserve Bank of Australia is off the table.
“It is unlikely that the Reserve Bank will shift away from its `interest rate stability’ rhetoric any time soon,” he said.
“A few more months of robust employment would be required.
“However the data is suggesting that a December quarter rate hike – that we had previously forecast – may actually come earlier.”