Australia Employment Rebounds In Q1

(RTTNews) - Australia's employment rebounded in the first quarter and the jobless rate rose only slightly, suggesting that the labor market remained resilient, data from the Australian Bureau of Statistics showed Thursday.

The number of employed persons increased 32,200 from the previous month, when it declined by revised 57,400. However, this was weaker than the expected increase of 39,800. At the same time, the number of unemployed rose by 3,000.

The unemployment rate rose to 4.1 percent from downwardly revised 4.0 percent in the December quarter. The rate was expected to advance to 4.2 percent.

The employment-to-population ratio remained at 64.1 percent in March, while the participation rate increased slightly to 66.8 percent. Monthly hours worked decreased 0.3 percent despite the growth in employment.

"A higher than usual number of people reported working reduced hours this month due to bad weather, coinciding with ex-Tropical Cyclone Alfred and other major weather events in New South Wales and Queensland," ABS head of labour statistics Sean Crick said.

Further, data showed that the underemployment rate held steady at 5.9 percent. The underutilization rate, which combines the unemployment and underemployment rates stood at 9.9 percent, unchanged from the previous quarter.

Capital Economics economist Abhijit Surya expects the labor market to loosen only modestly from here on out, with the unemployment rate peaking at 4.2 percent this quarter.

Accordingly, the Reserve Bank of Australia will only cut rates by another 50bp this cycle, well below the 125bp of cuts markets have priced in, the economist added.

At the April meeting, policymakers of the RBA said the May meeting would be an opportune time to revisit the monetary policy setting. The bank had retained its interest rate at 4.10 percent in April.