Job data may see Aussie rates rise
AUSTRALIAN employment climbed in March and the jobless rate fell to a 31-year low as builders and retailers hired more workers, raising expectations the central bank may raise interest rates as soon as next month.
Employers hired an extra 10,500 staff after adding a revised 23,200 in February. The jobless rate dropped to 4.5 percent from 4.6 percent, the Bureau of Statistics said yesterday in Sydney.
The median estimate of 22 economists was for 15,000 new jobs and an unchanged unemployment rate, according to a survey by Bloomberg News.
A worker shortage is driving up wages and consumer spending, underpinning an economic expansion now in its 16th year. Futures and currency traders have bet the Reserve Bank of Australia may soon raise interest rates after it warned last month inflation is likely to be “too high” this year.
“The Reserve Bank’s concerns about wages growth putting pressure on inflation are justified,” said Jarrod Kerr, an economist at JPMorgan Chase & Co in Sydney. “It’s a very resilient, very tight labor market.”
The Australian dollar rose to as high as 82.73 US cents from 82.45 US cents immediately before the report. It traded at 82.56 US cents at 4:30pm in Sydney. The yield on the benchmark 10-year government bond rose 1 basis point, or 0.01 percentage point, to 5.93 percent.
The number of full-time jobs rose 31,200 in March, the report showed, and part-time employment dropped 21,200. About 10.4 million of Australia’s 20.8 million people are employed, and the economy has created 276,600 new jobs in the past 12 months.
The Reserve Bank raised its benchmark interest rate three times last year after annual inflation breached its target range of between 2 percent and 3 percent for three straight quarters. The overnight cash rate target is at a six-year-high 6.25 percent.
A Credit Suisse index of futures contracts put the probability of a May interest-rate increase at 63 percent.