SYDNEY, April 16 (Reuters) – Australian employment rose broadly in line with expectations in March, while the jobless rate stayed low, but a war-driven global energy shock could test the labour market’s resilience soon.
Markets maintained bets that there is a 68% probability that the Reserve Bank of Australia could hike interest rates for a third time this year to 4.35% in May. The Australian dollar was firm at $0.7174, not far from a four-year top.
Figures from the Australian Bureau of Statistics showed on Thursday that net employment increased 17,900 in March from February, when it rose a revised 49,600. That was mostly in line with market forecasts of a trend-like 20,000 gain.
Full-time jobs jumped 52,500 after a sharp fall in the previous month.
The jobless rate held steady at 4.3%, also in line with forecasts, while the participation rate dipped to 66.8%, from 66.9%. Hours worked rose by a solid 0.5%.
“Australia’s labour market is still standing, for now,” said Russel Chesler, VanEck head of investments & capital markets.
“April employment numbers could present a very different picture as the impact of higher oil prices begins to flow through the economy. We have already seen both Qantas and Virgin reduce flight capacity and if this trend persists, it is likely to lead to cost cutting measures and potential job losses.”
The RBA has raised interest rates twice this year to 4.1%, undoing two of the three rate cuts from last year, as inflation was already running hot before the Iran war unleashed a global energy shock.
The labour market has stayed surprisingly resilient and may have even tightened a little in recent months, the RBA judged, although many analysts expect it to loosen this year amid higher interest rates and the Middle East conflict.
Surveys on Tuesday showed business and consumer confidence crashed to the lowest levels since the COVID pandemic, raising stagflation risks.
(Reporting by Stella Qiu; Editing by Muralikumar Anantharaman)
