Australia's jobless rate steady at 5.4%

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Jobless1 . File photo: Simphiwe Mbokazi.

Sydney - Australia's jobless rate held steady at 5.4 percent in January, data showed Thursday, with the economy creating a net 10,400 jobs.

The Australian Bureau of Statistics said the seasonally-adjusted unemployment rate was the same as the previous month, in line with analyst forecasts.

An increase in part-time employment offset a decline in full-time positions, with the total number of jobs created in the month slightly short of expectations.

The Australian dollar slipped to US$1.0301 from a morning high of $1.0333 ahead of the data, which was seen as supporting the Reserve Bank of Australia's decision this week to keep interest rates on hold at 3.0 percent.

In holding rates at a level equal to their record financial crisis low, the RBA said the “labour market (was) softening somewhat” but the 125 basis points in cuts from 2012 were yet to take full effect and global signs were positive.

Analysts said the steady jobs data showed that the RBA's rate cuts were having their desired effect, with an increase in hours worked showing continued demand.

“This certainly suggests that the labour market might be a bit tighter than many commentators have been touting and have been concerned about,” said HSBC Australia chief economist Paul Bloxham.

“We remain of the view that policy setting and global conditions are conducive for a pick up in local growth, so the steady jobs market is consistent with that view.”

Employment growth was most marked in the mining-powered states of Queensland and Western Australia, with drops in other states pointing to underlying sluggishness, other commentators said.

“Overall, it's still a soft reading and just holding the trend of soft jobs growth,” said St George Bank economist Janu Chan.

Macquarie's Brian Redican said the data was particularly troubling given the predicted peak in mining investment, with “replacement drivers for growth pretty thin on the ground”.

The government has warned that the boom in commodity prices that saw Australia weather the global financial crisis without going into recession is over, forecasting unemployment to hit 5.5 percent in the year to June.

The RBA is more optimistic, putting the mining investment boom's peak at sometime in 2013-14. - Sapa-AFP


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