Home World Business Unemployment falls to 5.5 per cent in May

Unemployment falls to 5.5 per cent in May

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The unemployment rate fell to 5.5 per cent in May, its lowest level since February 2013, as 42,000 new jobs were created.

The strong jobs creation was all in full-time employment, with 52,100 full-time positions being added to the economy while 10,100 part-time ones fell away, the Australian Bureau of Statistics said on Thursday.

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The participation rate, which refers to the number of people either employed or actively looking for work, edged up to 64.9 per cent, from 64.8 per cent in April.

Meanwhile, the quarterly seasonally adjusted underemployment rate decreased by 0.1 percentage points to 8.8 per cent.

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The data, which beat expectations of a flat rate of 5.7 per cent, buoyed the Australian dollar, which jumped more than a third of a cent to US76.27¢, nudging a two-month high.

The back-to-back jump in job numbers signals the labour market may be exiting a slow grind that’s been reflected by stagnant wages and fewer hours.

The economy is adjusting to the end of a resource boom and the central bank has cut its benchmark rate to a record-low 1.5 per cent in order to encourage firms to borrow and hire.

CommSec chief economist Craig James said the Reserve Bank of Australia wouldn’t be in a rush to lift rates, but rate cuts “could now be taken off the table”.

The participation rate edged up, to 64.9 per cent, from 64.8 per cent in April. The participation rate edged up, to 64.9 per cent, from 64.8 per cent in April. Photo: Erin Jonasson

“It’s hard to see the doomsayers finding too many negatives in the latest jobs report. Even the underutilisation rate fell sharply in the latest quarter,” Mr James said.

“More jobs and more hours worked means more spending and more momentum for the economy. This is a result to be celebrated by consumers and businesses alike.”

More to come

with wires

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