Investing.com-- Australia’s job market grew more than expected in April as tight labor conditions persisted for most part, although the unemployment rate also increased as a higher number of people without jobs began looking for work.
The total number of employed people in the country rose by 38,500 in April, data from the Australian Bureau of Statistics showed on Thursday. The increase was much higher than expectations of 22,400 people.
Australia’s participation rate, which represents the percentage of the working-age population that is in the workforce- rose to 66.7% in April from 66.6% in the prior month, beating expectations that it would remain static.
This saw the unemployment rate rise to 4.1% in April, beating expectations that it would increase to 3.9% in the month. March’s unemployment rate reading was also revised higher to 3.9%.
“The… increase in unemployment reflected more people without jobs available and looking for work, and also more people than usual indicating that they had a job that they were waiting to start in,” Bjorn Jarvis, ABS head of labour statistics said in a note.
While unemployment did increase in April, Thursday’s data showed that Australia’s labor market remained largely tight, even as wage growth in the country stagnated.
"The employment-to-population ratio remained steady at 64.0 per cent in April, indicating that recent employment growth is broadly keeping pace with population growth. This suggests that the labour market remains tight, though less tight than late 2022 and early 2023," Jarvis said.
A strong labor market gives the Reserve Bank of Australia more headroom to keep rates high for longer. The RBA is also more likely to keep policy tight after an overheated inflation reading for the first quarter, although analysts see little impetus for the central bank to raise rates higher.