Australia’s employment jumps in February, jobless rate still rises

By Stella Qiu

SYDNEY, March 19 (Reuters) – Australian employment rose by more than expected in February, though the jobless rate ticked up to a three-month high as more people joined the labour force, a ​mixed report that failed to provide much clarity for the ‌interest rate outlook.

Figures from the Australian Bureau of Statistics on Thursday showed net employment rose 48,900 in February from January, when it rose a revised 26,000. That was well above market forecasts of a 20,000 gain.

The gains were, however, driven by a 79,400 surge ‌in ​part-time jobs, particularly of those aged 65 and ⁠over as fewer of them ⁠retired last month. Full-time jobs fell 30,500.

The jobless rate rose to 4.3%, after holding at 4.1% for two months, as the participation rate climbed to 66.9%. Hours worked also fell 0.2%.

“The February jobs report leaned ​slightly weaker on the headline measures,” said My Bui, economist at AMP.

“With two consecutive rate hikes, we expect that the labour market would show ⁠some slack, albeit slowly, with the unemployment ⁠rate inching towards 4.4-4.5% by the end of this year.”

A ​still resilient labour market, which may even have tightened a little recently, was a ​reason why the Reserve Bank of Australia raised rates for ‌a second straight month on Tuesday as the Iran war stoked further inflationary pressures.

Markets now imply around a 57% chance the RBA will raise rates by another quarter-point to 4.35% at its May meeting, with additional 50 basis ⁠points of tightening to come this year.

Sean Crick, ABS head of labour statistics, noted that there were fewer people who were waiting to start a job in ⁠January moving into employment ‌last month and there were also more people remaining ⁠unemployed.

“The labour market has shown early signs of slowing ​down ‌in February,” said Harry McAuley, economist for Oxford Economics ​Australia, adding that ⁠he now expects the unemployment rate to peak at just shy of 4.6% in early 2027 as the economy slows.

“The key risk to the outlook is the severity and length of disruptions to key oil and gas routes in the Middle East.”

(Reporting by Stella Qiu and Wayne Cole; Editing by Jamie Freed ​and Lincoln Feast.)