Australia jobs rise in March, unemployment ticks up

[SYDNEY] Australia's unemployment rate ticked up only modestly in March against expectations for a larger spike, as the data covered the period before major mobility restrictions to fight the coronavirus kicked in.

Figures from the Australian Bureau of Statistics (ABS) on Thursday showed 5,900 net new jobs were added in March when analysts had predicted a drop of 40,000.

All of that gain was led by part-time work, which climbed 6,400 while full-time employment eased a tad.

The unemployment rate inched up to 5.2 per cent from 5.1 per cent in February, confounding expectations for a jump to 5.5 per cent.

The participation rate was steady at 66 per cent.

"The trend and seasonally adjusted estimates for March have not been impacted as a result of Covid-19, and they continue to provide a robust measure of the labour market," ABS said on its website.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

"This is primarily due to the reference weeks falling in the first half of March, when there was a relatively low number of confirmed Covid-19 cases within Australia, and many of the additional social distancing measures, shutdowns of non-essential services and trading restrictions had either not yet been announced or taken effect."

The data, which was collected between March 8 and March 28, covered the labour market for the first two weeks of the month.

Australia's total number of coronavirus infections are relatively small while the daily new cases have been slowing. However, the outbreak has spread rapidly from less than 100 cases in March to nearly 6,500 now.

With entire sectors of the economy shut to fight the virus, analysts polled by Reuters now expect Australia's A$2 trillion (S$1.8 trillion) of annual gross domestic product (GDP) to contract 3.3 per cent in 2020. Just a few months ago they had expected a 2.3 per cent expansion.

In a bid to blunt the economic damage, the Reserve Bank of Australia (RBA) has gone all-in by cutting rates to a record low of 0.25 per cent, flooding the financial system with cash and even buying government bonds to lower borrowing rates for business.

And Prime Minister Scott Morrison has jettisoned much of his conservative government's ideology of fiscal prudence and pledged spending worth more than 10 per cent of GDP, including a A$130 billion subsidy to employers to keep staff they might otherwise have let go.

Westpac chief economist Bill Evans estimates that without the subsidy, unemployment would have soared to 17 per cent by the end of June, but would now "only" reach 9 per cent.

REUTERS