Unemployment rises to 6.2 per cent as 2,900 jobs shed

Updated

Unemployment rose slightly to 6.2 per cent in April, with the ABS estimating 2,900 jobs were shed in the month.

The Bureau of Statistics estimates that full-time employment slid by 21,900 last month, while a 19,000-strong rise in part-time jobs could not offset that decline.

The rise in unemployment rate from 6.1 to 6.2 per cent was widely tipped by economists in the Bloomberg and Reuters surveys, with most expecting payback after last month's surprise improvement.

As a result, while the Australian dollar initially dipped a little on the data, but quickly settled back up to roughly where it had been trading for most of the morning, around 79.6 US cents.

Showing the relative stability of the data, the less volatile trend unemployment rate actually did the opposite to the seasonally adjusted figure, and declined slightly to 6.1 per cent for April.

The participation rate - the proportion of over-15-year-olds in work or looking for it - fell 0.1 of a percentage points, but due to rounding the headline figure remained at 64.8 per cent.

In a positive sign, despite the relative bias towards part-time job creation last month, aggregate monthly hours worked jumped 1.1 per cent.

Data reliability concerns remain

Economists are still dubious about the reliability of the data, despite the ABS conducting a review last year and changing its seasonal adjustment methodology.

RBC Capital Markets chief economist Su-Lin Ong said she is still reluctant to take the data at face value, and suspects the Reserve Bank is too.

"It is suggesting some stability in the unemployment rate," she told Reuters.

"Is the RBA really watching these numbers? If they were, they probably would not have cut this week."

It is important to remember that the ABS figures are an estimate based on a survey, rather like a very large poll, and, as with political polls, there is a substantial margin for error.

The ABS said it is 95 per cent sure that the change in employment was between -60,900 and +55,100 last month, with the unemployment rate somewhere between 5.8 and 6.6 per cent.

That is why economists prefer to look at the less volatile trend data, which indicate the direction the labour market has been heading in over several months.

State figures, due to being smaller sample sizes than the national data, are even more volatile.

However, the April data put South Australia back in the position of having the nation's highest unemployment rate.

Western Australia still has the lowest state rate, while the two territories have the lowest unemployment rates.

Topics: economic-trends, work, money-and-monetary-policy, australia

First posted