Australia’s unemployment rate fell 0.1 percentage points in February to an eight-year low of 4.9 per cent, but the number of people in full-time work also dropped for the third time in four months.
Part-time employment drove an overall increase in the number of people with jobs during the month, but seasonally adjusted data released on Thursday by the Australian Bureau of Statistics showed a 7300 drop in the number of people employed full-time.
Consensus was for the unemployment rate to stay flat at 5.0 per cent and the Australian dollar ticked up following the data’s release. But Capital Economics’ Marcel Thieliant noted the 4600 rise in employment was the weakest in a year.
The rise was well below the average 48,000 increase in the past six months, Mr Thieliant said.
“The fall in the unemployment rate to an eight-year low in February suggests that the RBA will remain its optimistic stance for now, but we still think that the labour market will soon start to slacken again,” he said.
“The upshot is that the unemployment rate should soon start to rise again, forcing the Reserve Bank of Australia to cut interest rates.”
The RBA kept the cash rate on hold at a record low 1.5 per cent at its March meeting. This week, it elaborated on its neutral stance, but increasing numbers of economists are predicting one or even two 0.25 percentage point cuts before the end of 2019.
The ABS said on Thursday it had to use previous data for the Townsville area because of the February floods and might reassess once March figures have been collated.
People in employment in Townsville accounted for about 1 per cent of all those employed in Australia in 2018, and about 4 per cent of those in Queensland.
“The imputation may have resulted in a slight overestimation of hours worked in Queensland in February 2019, given hours worked in Townsville may have been lower during the floods,” the ABS said.
The Australian dollar rose after the data’s release, from 71.32 to 71.60 US cents by 11.50am (AEDT).