Australia employment rebounds in Feb, jobless drops back to near 50-yr lows

By Stella Qiu

SYDNEY (Reuters) – Australia employment rebounded strongly in February after two months of declines, while the jobless rate fell back to near 50-year lows, suggesting the country’s labour market remained tight amid a slew of interest rate hikes by the central bank.

Figures from the Australian Bureau of Statistics (ABS) showed on Thursday that net employment rose 64,600 in February from January, when they fell a revised 10,900. Market forecasts had been for a rebound of 48,500.

The jobless rate dropped to 3.5%, from 3.7%, when analysts had looked for a dip to 3.6%, while hours worked jumped by 3.9% in another signal of resilience. Full-time employment soared by 74,900 jobs in February, compared with a drop of 43,300 the previous month.

However, the robust data was overshadowed by global events overnight, with turmoil at Credit Suisse reigniting fear that any tightening in lending conditions would hasten a global recession. That prompted investors to price out any chance of another rate hike from the Reserve Bank of Australia.

The local dollar were little moved at $0.6635 after the strong jobs data, while three-year bond futures held at 97.19, the highest since early August.

While investors are overwhelmingly leaning towards a pause in rate hikes in April, they have also priced in an around 10% chance the RBA could actually cut its 3.60% cash rate by 25 basis points. Rates were seen falling to 3.35% by August, a radical change from a month ago when investors had expected them to peak at 4.10%.

Bjorn Jarvis, ABS head of labour statistics, said the strength in February was due to a higher than usual number of people transitioning back into employment, as they left the workforce in January.

“While underlying employment growth has slowed down compared with what we saw through much of 2022, it is still increasing at close to its long-term historical rate,” said Jarvis.

(Reporting by Stella Qiu; Editing by Kenneth Maxwell)