Australian employers boosted payrolls in July and the unemployment rate unexpectedly fell as the nation’s resource-driven economy weathers a global slowdown, sending the local dollar near a 4 1/2-month high.
The number of people employed rose by 14,000 last month, the fourth gain in five months, erasing almost of half of the revised 28,300 fall in June, the statistics bureau said in Sydney today. That compares with the median estimate for a 10,000 increase in July employment in a Bloomberg News survey of 25 economists. The jobless rate fell to 5.2 percent from an upwardly revised 5.3 percent.
The Australian dollar gained and bets on an interest-rate cut declined as the data underscored the resilience of the world’s 13th-largest economy, where unemployment is less than half the 11.2 percent level in the euro area. Reserve Bank of Australia Governor Glenn Stevens lowered borrowing costs by a total of 75 basis points in May and June to shore up the economy as growth in Europe and China weakens, before keeping them unchanged at 3.5 percent at the past two meetings.
“The labor market is healthy without shooting the lights out,” said Savanth Sebastian, an economist in Sydney at Commonwealth Bank of Australia. “The jobs data will provide another degree of comfort for the Reserve Bank. An array of indicators has suggested that activity levels have bottomed out and showing modest signs of improving.”
The Australian dollar touched $1.0602 after the data, near the $1.0604 reached on Aug. 7, which was the highest since March 20. The so-called Aussie, the world’s fifth-most traded currency, climbed 2.6 percent in July after increasing 5.2 percent in June. It traded at $1.0592 at 12:42 p.m. in Sydney.
Traders are pricing in a 37 percent chance of a quarter-point rate cut at the RBA’s next meeting on Sept. 4, down from 42 percent before today’s data, according to Bloomberg data based on swaps trading.
The number of full-time jobs advanced by 9,200 in July, and part-time employment rose 4,800, today’s report showed. Australia’s participation rate, a measure of the labor force in proportion to the population, dropped to 65.2 percent in July from a revised 65.3 percent a month earlier, it showed.
The report showed 3,300 jobs created in the nation’s most populous state, New South Wales, helped counter a 3,800 decline in Victoria, a center of the nation’s manufacturing industry. In Western Australia, where much of Australia’s iron ore mines are based, employment fell by 4,200. In Queensland, the biggest coal-producing state, jobs gained by 6,200, the data showed.
Australia’s unemployment rate has remained in a range of 5 percent to 5.3 percent for the past 15 months.
Stevens, after his Aug. 7 decision to hold rates, said “most indicators suggest growth close to trend overall. Labor market data show moderate employment growth, even with job shedding in some industries, and the rate of unemployment has thus far remained low.”
The RBA releases its updated growth and inflation forecasts in a quarterly monetary policy statement tomorrow.
In New Zealand today, a government report showed the unemployment rate unexpectedly rose to 6.8 percent in the second quarter from 6.7 percent in January-March period. Employment fell by 0.1 percent, or 2,000 jobs, it showed. The median estimates in a Bloomberg survey of economists were for a jobless rate of 6.5 percent and job growth of 0.4 percent.
Recent Australian data has shown stronger consumer spending, fueled by A$2 billion ($2.1 billion) in government carbon rebates and benefit checks paid out since May, as well as the RBA rate cuts. Retail sales in June matched the biggest advance since April 2011.
Powering growth is Australia’s biggest resource boom since a gold rush in the 1850s. The latest bonanza -- for iron ore, coal and natural gas -- is bringing investment projects the government estimates to be worth A$500 billion.
Rio Tinto Group said in April that it has begun a four-month recruitment drive to hire 6,000 workers for A$22 billion of projects in Western Australia, the Northern Territory, Queensland and New South Wales.
The resources boom has underpinned Australia’s currency, and the local dollar’s surge has hurt manufacturing and tourism.
Ford Motor Co.’s Australian division will cut production about 29 percent and slash one in seven jobs after sales of its flagship Falcon car and trucks slumped.
The automaker will reduce output in Australia to 148 vehicles a day from 209, and offer as many as 440 severance payouts, the Dearborn, Michigan-based company said in an e-mailed statement on July 17. Ford will fire workers should acceptance of severance offers fall short of the goal, it said.