Australia`s economy remained a steady engine for job creation in February, with 1.75 new jobs last month, just below the 20, 000 forecast. However, it was the 17th consecutive month of growth in employment in Australia, the longest time since the official unemployment statistics began in 1978.
Australia`s unemployment rate rose from 5.5 percent in January to 5.6 percent in February, higher than expected, according to official figures released Thursday by the Australian Bureau of Statistics, (ABS).
Economists had expected the unemployment rate to be 5.5% in February.
However, full-time employment increased by 64900 and part-time workers fell by 47400.
The report showed that labour force participation rose to 65.7 percent in February from 65.6 percent in January, the highest level since the beginning of 2011, thanks to more women in the workforce.
Australia`s job market has been a bright spot in the economy, adding more than four hundred thousand jobs in 2017 as business conditions were at their strongest ever.
Australia`s employment growth rate is 3.5% a year, more than twice the 1.6% growth rate in the United States. Australia`s unemployment rate has hovered between 5.4% and 5.6% over the past 10 months.
And official interest rates are still at record lows, with state government spending heavily on new public works, while commodity prices have been rising. Together, these have contributed to the expansion of the labour market.
Underemployment, however, remains a key issue for policymakers. February data showed that the ratio of underemployed workers rose 0.1 percent to 8.4 percent.
Underutilization of the labour force also rose 0.1% to 13.9%.
As the supply of labour expands to meet demand, as idle capacity in the job market remains high, there is still a long way to go to achieve full employment, and downward pressure on wages and inflation may lead to flat wage growth. Interest rates remain unchanged for the time being.
Earlier, a survey by Seek, a hiring firm, showed demand for mining and engineering workers was rising again.
Australia`s new job ads are up 16 percent from a year ago, with mining, agriculture and engineering leading, according to Seek.
Mining has recorded a 45 percent rise in jobs this year, while engineering advertising has risen 63 percent of federal government and state government`s frenzied infrastructure spending.
The Seek figures are a sign of an increase in labour shortages in the two main mining states, Queensland and Western Australia, following (RBA), the Reserve Bank of Australia, on Tuesday.
Central bank officials also announced this month that there is no strong reason to raise interest rates because wage growth lags far behind job growth.
The futures market`s forecast for the possibility of raising interest rates has barely changed, with a 50 percent chance of raising rates by December, which the market believes will not be possible until March of next year.
