Thursday, May 30, 2024

Huge jobs gains raise risk of higher interest rates for longer, economists warn

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A shock surge in employment last month has seen the unemployment rate tumble back to levels not seen since September last year.

The unemployment rate has dropped back to 3.7 per cent with more than 116,000 extra Australians in employment last month, compared with January, according to seasonally adjusted data from the Australian Bureau of Statistics (ABS).

The estimated 116,500 increase in employment was the biggest monthly jobs gain since the east coast COVID lockdowns ended in November 2021, and the largest on record outside of the pandemic period.

The 0.8 per cent increase in jobs in February is the biggest monthly jobs gain since July 2000, just after the GST was introduced and ahead of the tourist boom driven by the Sydney Olympics.

The full picture on jobs: How to gauge the true health of the labour market

Economists were generally expecting about 40,000 extra people to be employed last month and an unemployment rate of 4 per cent.

That in itself would have been a strong bounce back from a big employment fall in January that saw unemployment rise above 4 per cent for the first time since early 2022, reaching 4.1 per cent.

“With employment growing by around 116,000 people, and the number of unemployed falling by 52,000 people, the unemployment rate fell to 3.7 per cent,” noted Bjorn Jarvis, who heads labour statistics for the ABS.

“This was around where it had been six months earlier.”

Average jobs growth still short of population increase

AMP deputy chief economist Diana Mousina noted that, over the past three months, an average of 23,000 jobs per month had been created.

That is at a time when separate data released by the ABS on Thursday revealed the population is growing much faster.

Posted , updated 

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