Jobs shocker sends warning shot across RBA

Today’s ABS labour force survey for April was a shocker, with the nation’s unemployment rate lifting to 3.7% (3.5% expected) on the back of a 4,300 reduction in jobs (+25,000 expected):

Full-time employment decreased by 27,100 to 9,726,500 people, while part-time employment increased by 22,800 to 4,155,600 people.

The unemployment rate would have risen by more had the participation rate not fell by 0.1%.

The employment-to-population ratio also fell by 0.2% to 64.2%.

The only saving graces were that underemployment fell by 0.1% to 6.1% and total monthly hours rose by 49 million hours (+2.6%).

However, the rise in hours worked “was because fewer people than usual worked reduced hours over the Easter period”, according to Bjorn Jarvis, ABS head of labour statistics.

When combined with Wednesday’s softer than expected wage growth data, the softening in Australia’s labour market should keep the RBA on hold when it decides on interest rates early next month.