The jobless rate rose in June, but markets took heart from a big full-time push. Photo: Louise KennerleyThe unemployment rate rose slightly in June, although a surge in full-time jobs may take some pressure off the Reserve Bank of Australia to cut interest rates further.
Nanjing Night Net

The Australian Bureau of Statistics said on Thursday its latest labour force survey showed a net 8000 jobs were created during the month, edging the official unemployment rate up to 5.8 per cent, from 5.7 per cent.

The participation rate rose slightly to 64.9 per cent.

However, in contrast to previous months, the newly employed were full-time, with the loss of more than 30,000 casual positions offsetting a 38,400-strong gain in full-time jobs.

The Australian dollar took heart from this, spiking more than one-quarter of a US cent, to around US76.30¢.

The latest jobs figures were in line with expectations.

Economists surveyed by Bloomberg had forecast a 0.1 percentage point jump in the headline rate, to 5.8 per cent, on the addition of 10,000 positions. The jobless rate had been steady at 5.7 per cent for three consecutive months until the June rise.

Capital Economics’ chief economist for Australia Paul Dales said the latest jobs numbers showed the market was “in reasonable shape”, although recent part-time trends and the low level of total hours worked pointed to “plenty of spare capacity”.

“There was more good news with all the rise in employment in June being due to a leap in full-time employment . . . while part-time employment fell . . . ,” he said.

“But the number of hours worked fell by 0.3 per cent month-on-month, and the bulk of the rise in employment over the past year has been due to more part-time jobs.

“The resulting spare capacity explains why wage growth is at a record low and why the RBA is more worried about the weak outlook for inflation than the outlook for the unemployment rate,” he said.

UBS economist George Tharenou agreed the RBA’s focus is now second-quarter consumer price data, released late this month.

“Overall, the labour market survey continues to signal a decent trend for jobs growth, with steady unemployment,” he said.

“This continues to put the onus on low inflation to see the RBA deliver our expected 25 basis point rate cut in August.”

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