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Australian employers added jobs in August, indicating record-low interest rates, a falling currency and weak wage growth is encouraging hiring.

Employment rose by 17,400 from July; economists forecast a 5,000 increase

The jobless rate dropped to 6.2 percent; matching economists’ estimates

Full-time jobs rose 11,500; part-time employment increased 5,900

Participation rate, a measure of the labor force in proportion to the population, fell to 65 percent from 65.1 percent; matching predictions





“The unemployment rate does seem stable in a 6 percent-to-6.25 percent range,” Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney, said after the release. “For a Reserve Bank that’s clearly reluctant to cut further, you’d have to get a weakening of the labor market” as one of the conditions before the central bank could consider easing policy again.

The report adds to increasing impetus in the housing construction and tourism industries that are soaking up workers surplus to requirements at mine sites where an investment boom is winding down. Still, a forecast decline in business spending and falling commodity prices are damping the economic outlook and prompted the central bank to cut rates twice this year to a record low 2 percent.

The Australian dollar traded at 69.94 U.S. cents at 12:16 p.m. in Sydney, from 69.52 cents before the data was released.

Underutilization Rate

The report showed the underutilization rate, or the number of people out of

work plus those wanting to work extra hours as a proportion of the labor force, held at 14.3 percent in August, after peaking at 14.8 percent in November 2014. The decline underscores the central bank’s view that the economy is producing a steady flow of jobs.

Underutilization rate appears to have peaked

Australia is facing the effects of a fall in prices for its key commodity exports. The central bank, which cut rates twice this year, is banking on a lower currency to help a transition to industries outside mining.

Currency Adjusted

Australia’s currency “has now adjusted considerably and this adjustment has continued over recent weeks,” central bank Deputy Governor Philip Lowe said in a speech Wednesday. “Just as the appreciation helped stabilize the economy in the upswing of the boom in commodity prices and mining investment, the depreciation is helping in the downswing.”

He said there are now signs of a pickup in investment in tourism, citing an increase in work to be done in the construction of hotels and related accommodation. Still, Lowe also said business investment outside mining is the “missing ingredient” in the economy’s adjustment.

National Australia Bank Ltd., the country’s biggest lender to business, said last month it’s planning to expand market share and hire 200 new bankers to support growth.

Trashline: (Updates with economist's comment in third paragraph.)