SYDNEY – Australia's unemployment rate fell to a lower-than-expected seasonally adjusted 5.7% in April from 5.9% in March, easing concerns around weakness in the job market and record low wages growth.
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Economists had expected an unemployment rate of 5.9% in April. The data sent the Australian dollar sharply higher against the U.S. dollar.
The number of people employed rose by 37,400, compared with an expected 5,000 rise, the Australian Bureau of Statistics said Thursday.
The number of people in full-time work fell by 11,600 in April, while those in part-time work rose by 49,000.
The bureau said its seasonally adjusted workforce participation rate, or the proportion of working-age people at work or actively seeking work, was unchanged at 64.8% in April and compared to a consensus expectation of 64.7%.
Data on Wednesday showed wages growth remained at a record-low level in the first quarter, suggesting there is still plenty of space capacity in the job market. This raises questions about the Reserve Bank of Australia's confidence around a gradual rise in inflation year.
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It also calls into question the government upbeat expectations for wages growth over the next few years, which underpin its revenue forecasts and pledge to restore the budget to surplus by 2021.
Concerns around the job market and stagnating wages comes as Australian house prices have surged, and household debt has climbed to record levels.
RBA Gov. Philip Lowe has indicated he is reluctant to lower interest rates further fearing it would only stoke the housing market, worsen the debt burden on consumers, and slow economic growth.
The RBA said Tuesday in minutes of its May 1 policy meeting that it is watching both the housing market and employment growth as guides to the outlook for interest rates.
"Developments in the labor market and housing markets warranted careful monitoring," the minutes said.
The central bank is boxed in for the moment, with any interest rates increases likely to impact on the job market.
Interest rates have been on hold at a record low 1.5% since August last year. Economists expect the RBA could be sidelined until 2018 at the earliest.
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(END) Dow Jones Newswires
May 17, 2017 21:50 ET (01:50 GMT)