Australian job creation rose faster than expected in July, although a sharp slowdown in full-time jobs raised concerns about the health of the labour market.
Employment rose by 26,200 in July, following an increase of 7,900 in June, the Australian Bureau of Statistics reported Thursday. A median estimate of economists called for an increase of 11,000.
However, the report showed a sharp decline in full-time employment, the biggest fall since 2003. Jobs in this category plunged 45,400 in July after an increase of 38,400 the previous month.
As a result, part-time employment was responsible for all of last month’s job growth. Part-time employment, which has been responsible for a large chunk of job creation this year, surged by 71,600. The economy shed 30,500 part-time jobs in June.
The unemployment rate edged lower to 5.7% from 5.8%. Economists forecast no change. Workforce participation – the percentage of workers employed or actively seeking work – held steady at 64.9%, official data showed.
Australia’s labour market has tightened since the beginning of the year, when unemployment was at 6%. The national unemployment rate reached a high of 6.4% in July 2014 and spent the better part of 2015 north of 6%.
While the rate of job creation has cooled since the end of last year, recent data point to a firmer domestic economy buoyed by record low interest rates and higher household consumption.
The Reserve Bank of Australia (RBA) lowered interest rates this month, as policymakers stepped up their efforts to combat weak inflation. It was the second rate reduction since May. The minutes of the August policy meeting, which were released Wednesday, showed that officials were in broad support of the additional easing.
RBA officials “observed that while prospects for growth were positive, there was room for stronger growth, which could be assisted by lower interest rates.”
The Australian dollar was trading higher after Thursday’s release. The AUD/USD exchange rate advanced 0.3% to 0.7679. The Aussie has gained 1.5% against its US counterpart over the past four weeks.Economiccalendar