Policy stimulus needed to cut Australia’s jobless rate to 4.5 percent mark as growth slows to decade lows, analysts say.

Australian full-time employment surged in June but the jobless rate stayed stuck at 5.2 percent for a third straight month as more people looked for work, a sign of spare capacity that argues for more policy stimulus.

Thursday’s figures from the Australian Bureau of Statistics (ABS) showed 500 new jobs were added last month as a slump in part-time work overshadowed the 21,100 jump in full-time employment.

The monthly employment series has gained even more importance recently as the Reserve Bank of Australia (RBA) is closely watching labour market trends, awaiting a much-needed pick-up in wage growth and inflation.

“This report reinforces the view that labour market conditions have eased,” said Callam Pickering, APAC economist for global job site Indeed.

The RBA has recently estimated that the jobless rate will need to fall to 4.5 percent to generate any wage pressures. To help achieve that level it chopped interest rates twice since June to a record low of one percent as the economy grapples with subdued home prices and miserly consumer spending.

Economists expect another cut later this year, probably by November while some are predicting policy at 0.5 percent in 2020 as the RBA steps up efforts to revive growth in the 1.9 trillion Australian dollar ($1.3 trillion) economy which has slowed to decade lows.

Financial markets pared the chance of an August move by the RBA as Thursday’s report was “not dramatic enough” to prompt a cut next month, AMP chief economist Shane Oliver said.

“We see a further slowdown in jobs growth over the next six months,” Oliver said, citing a slowing in jobs ads, vacancies and hiring plans.

“We remain of the view that [the RBA] will still have to cut rates further later this year ultimately taking the cash rate down to 0.5 percent early next year.”

Getting unemployment to 4.5 percent looks like a tough task as Thursday’s data showed it held at 5.2 percent in June. The jobless rate got as low as 4.9 percent in February but has since been nudging higher.

That upturn has come even as hiring remained solid. Overall annual employment growth of 2.4 percent handily outpaced the US performance of 1.6 percent.

Yet a constant influx of skilled migrants means the labour force is also expanding rapidly. Australia’s annual population growth of 1.6 percent is among the highest in the developed world.

That explains why participation stayed at a record peak of 66.0 percent in June, meaning nearly two of every three people are currently engaged in the labour market.

“Putting the pieces together, another rate cut appears more likely than not,” Indeed’s Pickering said.

“November is the most likely month.”