Australia employment unexpectedly slips in May, jobless still steady
By Wayne Cole
SYDNEY (Reuters) - Australian employment unexpectedly fell for the first time in five months in May, though any disappointment was tempered by a surprisingly steady jobless rate and a solid increase in full-time hiring.
Thursday's data from the Australian Bureau of Statistics showed a net 4,800 jobs were lost in May, short of market forecasts of a 10,000 rise. However, all the loss came in part-time positions with full-time jobs up a healthy 22,200.
The unemployment rate also held steady at 5.8 percent when analysts had looked for an increase to 5.9 percent. That was the third straight month of unchanged outcomes and kept alive hopes the jobless rate was near its peak for this cycle.
Just a few months ago the consensus had been that unemployment would rise to the 6.25-6.5 percent zone this year.
"The overall tone is one of a labour market that's mirroring to some degree the economy, which was strong late last year, early this year and momentum has eased a little in Q2," said Su-Lin Ong, a senior economist at RBC Capital Markets.
"So there's no real urgency to do anything on the rate front, and that remains very much the message - a Reserve Bank that stays on the sidelines for the foreseeable future."
That view was pretty much the judgement of markets as the local dollar dipped just a whisker on the data to $0.9378 while interest rate futures <0#YIB:> implied the cash rate would remain at 2.5 percent out to the end of the year.
The Reserve Bank of Australia (RBA) has already kept rates steady for 10 months amid signs past cuts were working to energise the economy.
One fly in the ointment has been a marked negative reaction to the Liberal National government's May budget which contained a mix of higher taxes and charges and spending cutbacks.
Surveys of consumers showed a sharp fall in confidence in May and little sign of a pick up so far in June, stirring concerns that spending would also suffer.
That could be one reason the RBA has cautioned that it would likely be some time before the unemployment rate started to fall in a sustained manner.
"The RBA said they really needed unemployment to decline and, as of yet, it is steady," said Annette Beacher, head of Asia-Pacific research at TD Securities."We need to see a meaningful turnaround before they start turning bullish on the labour market. This (data) supports rates on hold for now."
(Editing by Eric Meijer)