SYDNEY: Australian employers unexpectedly cut jobs in April, as the government’s JobKeeper wage subsidy ended, though unemployment also declined as fewer people sought work.
The economy shed 30,600 roles, led by a 64,400 drop in part-time positions, while full-time employment advanced, data from the statistics bureau showed yesterday in Sydney.
The jobless rate declined to 5.5% from an upwardly revised 5.7% in March, versus economists’ median estimate of 5.6%. The participation rate fell to 66%.
“Some of the 31,000 fall in employment may relate to the end of JobKeeper, but it could also reflect usual month-to-month variation in the labour market and some larger than usual seasonal changes similar to those we saw earlier in the year, ” said Bjorn Jarvis, head of labour statistics at the Australian Bureau of Statistics.
The Australian dollar fell initially and was trading at 77.39 US cents (RM3.21) at 11.52am in Sydney.
The result brings an end to a string of hiring increases and may foreshadow difficulties other developed economies might face as they seek to wind back emergency fiscal support measures.
Yet both the Reserve Bank of Australia (RBA) and Treasury expect that the labour market’s strengthening will resume after a period of adjustment.
The RBA is due to decide in July whether to roll over its three-year yield target bond to November 2024 from the current April 2024 and whether to undertake further quantitative easing (QE).
It’s in the second A$100bil (US$77bil or RM319bil) tranche of QE, having cut the cash rate to near zero.
The government last week announced an expansionary budget that’s designed to keep the economy running hot and get more people into employment.
The fiscal and monetary authorities are combining to drive down unemployment in order to revive wages growth and inflation.
Among other details in the jobs report was that monthly hours worked had slid 0.7% in April.
Under-employment decreased by 0.2 percentage point to 7.8%; and under-utilisation declined 0.4 percentage point to 13.3%.
The central bank’s updated quarterly forecasts showed the jobless rate falling to 5% by the end of this year and 4.5% at the end of 2022. Under an optimistic scenario for unemployment, the rate would drop to 3.75% by mid-2023.
The labour market is at a potential inflection point with the March 28 expiry of JobKeeper, designed to keep workers attached to their employers. Treasury estimated between 16,000 and 40,000 roles were lost in the two weeks immediately after the programme’s end. Yet business sentiment in April broke new records with the employment, profitability and trading indicators all surging. Job advertisements also continued to suggest future gains in hiring, rising 4.7% in April. ─ Bloomberg