Australian employers added jobs in June, led by full-time positions, indicating improved business confidence is translating into increased hiring.
The number of people employed rose by 7,300, much fewer than the revised 40,000 in May, government data showed Thursday. That compared with the median forecast of 28 economists for no change. The jobless rate edged up to 6 percent from a revised 5.9 percent.
The report adds to increasing impetus in housing construction that is soaking up workers who are surplus to requirements at mine sites where an investment boom is winding down. Still, a forecast record decline in business investment and falling commodity prices are damping the economic outlook.
“Today’s report does add validity to the employment trend -- but I still think 40,000 jobs last month is too good to be true,” said Stephen Walters, chief economist for Australia at JPMorgan Chase & Co. “The numbers just seem too big to gel with what we’re hearing out in the business community about lack of confidence and lack of certainty around policy.”
The statistics agency has in the past cited challenges in compiling the monthly report. Last month’s gain, initially reported as a 42,000 rise, was almost triple economists’ estimates and rekindled doubts about the data.
The Australian dollar was higher after the report, trading at 74.53 U.S. cents at 12:48 p.m. in Sydney from 74.25 cents before the data.
The number of full-time jobs rose by 24,500 in June, and part-time employment fell by 17,200, the report showed. Australia’s participation rate, a measure of the labor force in proportion to the population, increased to 64.8 percent in June from 64.7 percent a month earlier, it showed.
“The continued resilience of the labor market in June seems odd given the economic challenges that Australia is facing,” said Paul Dales, chief Australia and New Zealand economist at Capital Economics. “We expect that an easing in jobs growth and a rise in the unemployment rate in the second half of the year will play a part in prompting the RBA to cut interest rates from 2 percent now to 1.5 percent.”
Australia is facing the effects of a fall in prices for its key commodity exports, led by iron ore, which has entered a bear market. The central bank, which cut rates twice this year to 2 percent, is banking on a lower currency to help a transition to industries outside mining.
“The Australian dollar has declined noticeably against a rising U.S. dollar over the past year, though less so against a basket of currencies,” Governor Glenn Stevens said Tuesday after leaving the cash rate unchanged. “Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.”
Woolworths Ltd., Australia’s largest supermarket chain, said in June it plans to spend A$650 million ($483 million) and add 2,000 new jobs in the southern state of Victoria over the next three years.