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Australian jobless rate unexpectedly declines; currency surges

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Australian unemployment unexpectedly fell in May to the lowest in a year, indicating that improved business confidence is translating into increased hiring. The currency jumped.

[SYDNEY] Australian unemployment unexpectedly fell in May to the lowest in a year, indicating that improved business confidence is translating into increased hiring. The currency jumped.

The jobless rate dropped to 6 per cent from a revised 6.1 per cent, compared with economists' estimate of 6.2 per cent, government data showed Thursday. The number of people employed advanced 42,000, almost three times the number predicted.

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, central bank Governor Glenn Stevens said this week he's open to reducing the record-low 2 per cent interest rate further to add support to the economy's transition.

"Growth in employment is reasonable and consistent with a flat unemployment rate," Michael Blythe, chief economist at Commonwealth Bank of Australia, said in a research report ahead of the release.

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The Australian dollar traded at 77.71 US cents at 11:37 am in Sydney, from 77.17 cents before the data was released.

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