Australian unemployment posted a surprise drop to 5.1 percent yesterday, with 46,300 jobs created last month — quadruple forecasts at a time when banks and airline Qantas have announced layoffs.
The Australian Bureau of Statistics said both part-time and full-time employment increased last month, driving unemployment down 0.1 percentage points to a seasonally adjusted 5.1 percent.
The Australian dollar soared to US$1.0738 from US$1.0681 on the upbeat result, which significantly overshot analyst forecasts of 10,000 new jobs and unemployment of 5.3 percent.
It came as national airline Qantas unveiled at least 500 job cuts yesterday on an 83 percent plunge in first-half profits. Australia’s banks have also recently flagged hundreds of sackings as global headwinds grow.
ANZ on Monday slashed 1,000 jobs, Westpac is set to axe 550 positions and the local arm of the Royal Bank of Scotland will lose 170 workers.
Australian Employment Minister Bill Shorten warned that monthly jobs figures were volatile and the Australian economy was under pressure, particularly because of the high value of the Australian dollar.
“When you look at what’s happening in Europe and you look at what’s happening in North America, it shows that this is a resilient economy, [but] nothing to be complacent about,” Shorten told reporters.
“Definitely there will be upward pressure on unemployment in future months, but we are doing better than a lot of other parts of the world,” he said.
Canberra expects the jobless rate to hit 5.5 percent in the middle of this year, compared with 8.3 percent unemployment in the US and a record 10.4 percent in the eurozone.
Analysts said the solid result was proof of the Australian economy’s persistent strength and it supported the central bank’s decision to keep the official cash rate on hold at 4.25 percent at its most recent meeting.
“The Australian economy is expanding at a rate that was unexpected,” CMC Markets analyst Michael McCarthy said. “That the unemployment rate dropped to 5.1 with an expansion in the participation rate says good things.”
However, many agreed that the rate would nudge upward in coming months given the recent spate of sackings and a rally in the Australian dollar.
“It is positive that there is a gain, and a big gain and some recovery from the past two months, but still the overall trend of growth is quite weak,” St George Bank economist Janu Chan said.