Far more people found work last month than expected, suggesting there is still plenty of heat in Australia’s labour market.
The 53,000 lift in employment outstripped the 20,000 consensus figure economists landed on, with the official jobless rate hanging about 50-year lows for yet another month.
The 3.5 per cent jobless rate for the month of March follows almost a year of ultra-low unemployment and defies signals of a cooling jobs market such as a slowdown in the number of open job advertisements.
Australian Bureau of Statistics head of labour statistics Lauren Ford said both the employment-to-population ratio, lifting 0.1 per cent to 64.4 per cent, and the participation rate, holding firm at 66.7 per cent, were close to historic highs.
The figures reflected ongoing tightness in the labour market and explained why employers were finding it hard to fill roles, she said.
Commonwealth Bank economist Stephen Wu said the labour force data reflected a tight labour market able to absorb an influx of workers from overseas migration, especially international students.
He also said households were likely financially stretched by the high cost of living and soaring mortgage repayments, nudging more people into work.
KPMG chief economist Brendan Rynne said the labour force report illustrated the strength of the economy and its ability to exceed expectations.
“What this shows is just amazing strength within the labour market and the Australian economy, and certainly much, much stronger than what any of us had predicted,” he told ABC News on Thursday.
Dr Rynne said the numbers would keep pressure on the Reserve Bank to hike in May after it opted to pause interest rate rises in April, along with signs inflation was “still a bit sticky” despite coming off its peak.
Several economists agreed the employment report, together with markers of resilience in the business community revealed in surveys earlier in the week, would bolster the case for more hikes but others weren’t so sure.
HSBC chief economist Paul Bloxham said the RBA kept its eyes peeled on jobs market data to get a read on wage pressures, with extremely strong wage growth posing a problem for the central bank’s task of taming inflation.
But Mr Bloxham said ultra-low unemployment across several months had failed to trigger massive wage growth.
Wages have lifted but growth remained within the range the RBA was comfortable with to bring down inflation, he said.
“We expect the RBA’s hiking phase to remain paused in coming months.”
Treasurer Jim Chalmers, in the US for a series of meetings with global financial leaders, said the strong jobs report would stand Australia’s economy in good stead as global uncertainties continued to loom.
“Our goal is to build a bigger, better-trained workforce, boost incomes and living standards and to create more opportunities for more people in more parts of Australia – and the budget I will hand down in May will help us achieve that,” Mr Chalmers said.
Shadow treasurer Angus Taylor said the government needed to rein in spending in the budget and do more to help the Reserve Bank manage inflation.
“There is much the government can do,” Mr Taylor told reporters on Thursday.
“The idea that you leave this to the Reserve Bank will impose more pain on Australians.”
© AAP 2023
