Finance Work Unemployment holds steady at 5.9 per cent, on a 60,000-strong jobs surge

Unemployment holds steady at 5.9 per cent, on a 60,000-strong jobs surge

Unemployment rate
ANZ's job ads series is foreshadowing a gradual improvement in employment growth. Photo: ABC
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Australia’s unemployment rate has remained steady at 5.9 per cent in March, boosted by the creation of 60,900 jobs.

The even better news in the data was that all of the additions were full-time positions.

The Bureau of Statistics estimated that 74,500 full-time jobs were created in March, while 13,600 part-time jobs were lost.

The participation rate jumped by 0.2 percentage points to 64.8 per cent, meaning a greater proportion of the population was in work or looking for it.

This increase in participation is the reason why the unemployment rate remained stuck at 5.9 per cent, despite extremely strong jobs growth.

However, Capital Economics analyst Paul Dales said the increases in participation and employment are suspiciously large.

“The surge in employment, all of which was due to a 74,500 rise in full-time jobs, should be taken with a pinch of salt,” he cautioned.

“That’s the biggest absolute change since October 2015 and doesn’t seem to fit with other evidence that economic conditions have softened a bit since the start of the year.

“The fact that it was accompanied by a 64,900 leap in the size of the labour force … suggests that the rise in employment has more to do with survey sampling issues than anything else.”

CommSec chief economist Craig James pointed out that the trend figure is a better indicator of the labour market’s true health.

“It is a case of the trend is your friend. The seasonally adjusted job figures are clearly volatile,” he wrote in a note.

“But the trend data smooths out the bumps and shows employment rising by 16,500 in March with the jobless rate at 5.8 per cent.

“That seems to line up better with all the other economic indicators and surveys.”

The result was much better than forecast, with the typical economist having expected employment to increase by around 20,000 and unemployment to remain at 5.9 per cent.

The Australian dollar jumped on the data, hitting 75.7 US cents by 11:45am (AEST).