The Australian unemployment rate has crept up for the second month in a row and it’s pushing the Reserve Bank closer to an official interest rate cut.
Our nation’s unemployment rate rose in April, up from 5.1 per cent to 5.2 per cent seasonally adjusted.
The official figure was higher than the consensus forecast and the RBA’s desired improving outlook.
On the positive side, job creation numbers remained solid and more people have joined the participation rate in the workforce meaning there’s more people out there looking for work.
NAB economist Kaixin Owyong told the ABC that the higher jobless rate increased the chance of a rate cut next month.
“In recent statements, the RBA has said that a lack of improvement in the labour market would warrant a cut, such that today’s deterioration is likely to be of great concern to them,” he said.
“We now place a 50/50 chance of a cut in June.”
The Commonwealth Bank’s Belinda Allen said these latest unemployment figures were both good news and bad news.
“What is clear is that there is spare capacity as the trend higher in the underemployment rate and unemployment rate shows,” she said.
“The RBA could cut rates to try and close that gap and push inflation back towards target.”
“But this release tells us little more than the story of recent months and the RBA has left rates on hold in that environment.”
Victoria and New South Wales are the two strongest jobs markets of the bigger states.
Queensland was the only state for the month to record a fall in unemployment, but they continue to struggle with the jobs market, along with South Australia, Western Australia and Tasmania who all recorded an unemployment rate over 6 per cent in April.