Australia has some good news. Its unemployment rate dropped to 5.8 percent in February and marked a marginal improvement in the job market. However, analysts point out that it was the lower participation of labour force that led to the dip than any real surge in job creation.
According to the data from the Australian Bureau of Statistics, the employment numbers edged up 300 in February, reports The Sydney Morning Herald.
- Unemployment fell to 5.8 percent from 6 percent of January
- Economists had predicted no change at 6 percent
- Full-time jobs increased by 15,900
- Part-time jobs decreased by 15,600
The news was greeted by ANZ Bank as “relatively positive.”
“The slowing in measured employment growth reflects some statistical payback from the outsized gains recorded at the end of 2015,” the bank said. It said the decline in unemployment rate suggests of an underlying healthy condition in the labour market.
The slippage in unemployment was actually the fall out of a lower participation rate. It meant, less number of people chased jobs. JP Morgan called it “short-term aberration.”
The participation rate, as a measure of the labor force in the population, fell to 64.9 percent from a revised 65.1 percent. The economists had predicted it at 65.2 percent.
“The drop in participation comes as a surprise and jars against established upward trend of the past 18 months,” said the bank’s economist Tom Kennedy.
He said the positive part of the weakened participation was that it was restricted to males aged 15-24 rather than becoming a massive pull back in labour supply.
“Employment hasn’t increased at all over the past three months,” affirmed Paul Dales, chief economist for Australia and New Zealand at Capital Economics. He also said the dip in Australia’s jobless rate may prod the central bank to keep the interest rates on hold.
Australia recorded a surge in jobs in October and November 2015. The data in March showed that the economy had grown 3 percent in the final quarter of 2015, says a Bloomberg report.
Meanwhile, the Macquarie Group announced the hiring of 400 staff for managing its Esanda dealer finance business.