The Reserve Bank of Australia will need to cut interest rates several times this year as this week's labour report understates the slack in the economy, Credit Suisse predicts.

While jobs growth in April surpassed expectations and the unemployment rate fell to a four-month low, the number of actual full-time jobs fell and the weakness in the data's detail would have been bigger if it hadn't been for statistical distortions, Credit Suisse analysts led by Damien Boey said in a note to investors.

The Credit Suisse team's rate cut prediction contrasts sharply with collective market wisdom, which expects the RBA to stay pat at a record low cash rate of 1.5 per cent for the rest of the year.

"The output gap is at levels historically consistent with another cash rate cut," Credit Suisse argued. [The output gap is a measure that shows by how much the GDP of an economy falls short of its full potential.]