Australia's unemployment rate holds steady.
The latest jobs report, which was released by the Australian Bureau of Statistics (ABS) on Thursday, showed that the unemployment rate held steady in March at 4.3%, the same as February, in seasonally-adjusted terms.
The participation rate, in seasonally-adjusted terms, fell to 66.8%, down from 66.9% in February.
By state, Victoria had the highest unemployment rate in March, in seasonally-adjusted terms, at 4.8%, followed by Tasmania, at 4.6%. Meanwhile, Queensland recorded the lowest unemployment rate at 3.7%. South Australia followed at 4.0%.
"The labour market clearly remains on a solid footing, with conditions broadly stable over the six months at a level that is still tighter than our and the RBA's estimates of full employment," said Harry Ottley, economist at Commonwealth Bank of Australia (CBA). "The current tightness, however, is now less of a concern given the downside risks the labour market faces from higher interest rates and the energy crisis."
The economist added that CBA expects unemployment to continue rising as economic growth around the country slows.
"We expect a peak of 4.7% in late 2027," he said. "But risks around this forecast depend on how the energy crisis unfolds from here."
The nation's jobs report offers the latest glimpse into where interest rates may be heading. Mortgage holders and investors nationwide have been under mounting pressure with higher interest rates. The Reserve Bank of Australia (RBA) delivered back-to-back hikes to the official cash rate (OCR), in February and March, taking the current OCR to 4.10%. And with inflation still elevated and global uncertainty persisting, further increases remain on the table. All four of Australia’s Big Four banks expect the nation's central bank to raise rates again at its May meeting.
Drivers include tensions in the Middle East and ongoing inflationary pressures. The RBA is working to keep the inflationary rate with its target range of 2% to 3%. But inflation has yet to show signs of slowing since the start of the year. January's headline CPI print was 3.8%, the same as December, while trimmed mean inflation edged up to 3.4%, from 3.3% the month earlier. That's on top of increases in both headline CPI and trimmed mean inflation in December's print. The conflict in the Middle East, which escalated in March, has done little to relieve price pressures. In fact, it has added to them, raising fuel and other commodity prices globally, including in Australia.
The latest unemployment data offers no clear signal on the direction the RBA may take at its next meeting on monetary policy, if it moves at all. But economists say the data is more likely to influence how the RBA talks about the labour market than to drive an immediate policy change.
"While the RBA is likely to continue to assess labour market conditions as tight, another month with the unemployment rate at 4.3% makes it less tight than was the case earlier in the year when the unemployment rate had dipped down to 4.1%," economists at ANZ wrote in a note. "As a result, we expect a subtle shift in the RBA’s characterisation of labour market conditions following next month’s board meeting and expect they will drop the assessment that conditions have tightened recently."
