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Unemployment Rate in Australia Declined to 5.5% Lowest in 4 Years

Unemployment rate in Australia fell to a lower than expected seasonally adjusted 5.5% in May from 5.7% in April, the Australian Bureau of Statistics said. It’s Australia’s lowest jobless rate in 4 years.

The number of people employed rose by 42,000, compared with an expected 10,000 rise. The number of people in full-time work increased by 52,100 in May, while those in part-time work fell by 10,100.

 

According to the bureau,  its seasonally adjusted workforce participation rate rose to 64.9% in May from 64.8% in April, and a consensus expectation of 64.8%.

The economy has added around 150,000 new jobs since January. Data supports the view that there is underlying strength in the economy even after Australian GDP grew at its slowest on year pace since 2009 in the first quarter.

CommSec chief economist Craig James said the positive employment trend would provide momentum for the economy, as May’s job creation follows almost 100,000 jobs being added across March and April.

The job market data now comes into line with upbeat business surveys and strong forward looking employment indicators.

 

RBA has its eye on the job market, but has indicated it will largely ignore the weak first quarter GDP data. Interest rates have been held at a record low since August last year and the RBA has indicated its preparedness to remain sidelined for some time yet as it allows inflation to rise slowly.

 

 

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Economic Growth in Australia Declined 0.3% in Q1 of 2017

Economic growth in Australia dropped 0.3% in the first quarter, seeing the the year-on-year increase slow to just 1.7%, the weakest expansion since 2009.

The result was in line with market expectations but well below the 1.1% increase recorded in the Q4 of 2016. Economists have started growing cautious at slowing growth, figures potentially pointing to an inevitable recession. 


Australian Bureau of Statistics tracked 20 industries and 17 have a recorded growth during the Q1, with the best performers including finance and insurance services, wholesale trade and health care and social assistance. 

Agriculture, forestry and fishing decreased after strong growth in the previous two quarters, while manufacturing decreased for the tenth time in 11 quarter. Dwelling investment declined in all states, except Victoria and overall is the largest decline for Australia since June 2009. 

However, Gross Domestic Product (GDP) data were well received by the market, which, after poor net export figures on Tuesday, was primed for disappointment. The Australian dollar shot higher to be up 0.4 per cent at $0.7537. 

Data yesterday showed net exports as a percentage of GDP fell 0.7% points in the Q1, which prompted many economists to trim their forecasts for March quarter growth and offset some stronger inventories data that were released. 

 

According to the Reserve Bank of Australia, the economic growth is still expected to increase gradually over the next couple of years to a little above 3%.

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