Australian employment unexpectedly declined in March, resulting in a slight uptick in the jobless rate and reflecting the impact of restrictive monetary policy measures, according to Bloomberg.
According to government data released Thursday, the economy lost 6,600 jobs, defying expectations of a 10,000-job increase, following a surge of over 100,000 jobs in February. Unemployment rose to 3.8 per cent from 3.7 per cent in February.
Su-Lin Ong, chief economist at the Royal Bank of Canada, told Bloomberg that the data indicates a robust yet somewhat constrained labour market. Despite economic growth below trend, consumer uncertainty, and subdued confidence, the labour market has shown resilience.
Ong noted that these results raise the likelihood of the Reserve Bank pursuing a gradual and delayed interest rate reduction strategy. Economists currently anticipate the rate-cutting cycle to commence in the final quarter of the year, with money markets indicating a nearly 50-50 chance of a reduction in November.
Despite the uptick in the jobless rate in March, a level below 4 per cent still suggests that the market is operating close to full capacity. Both the employment-to-population ratio and participation rate are hovering near record highs.
Following the data release, the Australian dollar extended its intraday gains, reaching 64.48 US cents, while the yield on the three-year government bond, which is sensitive to policy changes, eased slightly to 3.90 per cent.
