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Australia added 38,500 jobs in July as doubts linger over data
[SYDNEY] Australian employers added almost four times the number of jobs predicted in July, a surge that failed to bolster the currency as concerns remain about the volatility of the data.
The number of people employed rose 38,500 from a month earlier, compared with a median forecast for a 10,000 increase, government data showed Thursday. The jobless rate climbed to 6.3 per cent from a revised 6.1 per cent as a jump in the number of people entering the labor market exceeded the number of new hires.
"We would treat the numbers with a bit of caution," said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. "An unemployment rate that is on the high side is consistent with sub-trend growth and weak domestic demand." The statistics agency has in the past cited challenges in compiling the report. After large swings in the monthly jobs numbers, the country's statistician in October reviewed the agency's data calculation method.
Central bank Governor Glenn Stevens said last month that he had expected the jobless rate would have been higher than it was. Policy makers have slashed interest rates to a record low amid a forecast record decline in business investment and falling commodity prices.
The Australian dollar traded at 73.28 US cents at 12:33 pm in Sydney, from 73.56 cents before the data was released.
While economic "growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year," Mr Stevens said Tuesday after keeping the cash rate unchanged. "Overall, the economy is likely to be operating with a degree of spare capacity for some time yet." The number of full-time jobs rose by 12,400 in July, and part-time employment increased by 26,100, the report showed. Australia's participation rate, a measure of the labor force in proportion to the population, jumped to a two-year high of 65.1 per cent in July from 64.8 per cent a month earlier.
Australia is facing the effects of a fall in prices for its key commodity exports, led by iron ore. The central bank, which cut rates twice this year to 2 per cent, is banking on a lower currency to help a transition to industries outside mining.