Australia's April unemployment falls to year low, Australian dollar rises

[SYDNEY] Australia's jobless rate fell for a sixth consecutive month in April to the lowest in a year despite a shocking drop in employment as fewer people went looking for work, sending the local dollar climbing.

Thursday's figures from the Australian Bureau of Statistics (ABS) showed a decline of 30,600 jobs in April, confounding economists' expectations for a 15,000 increase.

Unemployment eased to 5.5 per cent, the lowest since April 2020, and marking a remarkable recovery from the top of 7.4 per cent hit last July when coronavirus lockdowns tipped the economy into recession.

Analysts polled by Reuters had expected the unemployment rate at 5.6 per cent.

While the better-than-forecast improvement will be welcomed by the country's central bank, there is still plenty spare capacity in Australia's labour market.

The Reserve Bank of Australia (RBA) believes full employment, the level where the labour market is tight enough to generate wage pressure, could be around 4 per cent or lower.

The participation rate declined to 66 per cent to be back to around pre-pandemic levels.

In response to the faster-than-expected fall in the unemployment rate, the Australian dollar jumped to the day's high of US$0.7744 from a one-week low of US$0.7710 touched on Wednesday.

REUTERS